Should Brands Worry About Washington’s Crackdown on Xinjiang Goods?
What Happened: On December 8, the United States House of Representatives overwhelmingly passed a bill, 428 votes to 1, that would ban imported products made in China’s Xinjiang region unless companies can proactively prove that no forced labor was involved. However, the legislation’s fate is uncertain as major businesses — including Nike, Coca-Cola, and Apple — lobby the Senate to weaken provisions, arguing that the requirements would disrupt global supply chains. This comes after the US Customs and Border Protection barred all Xinjiang-sourced cotton and tomato products from entering the country in January, causing a Uniqlo shipment to be seized.
The Jing Take: The Biden Administration’s latest move could further cripple relations between the US and China. Already, tensions are high after Washington announced that it would not be sending representatives to the Beijing Winter Olypmic Games over concerns about China’s treatment of Uyghurs, to which Beijing ominously responded that boycotting nations “will pay the price for their mistaken acts” and repeatedly denied repression of the Muslim minority group.
On the flip side, global brands have grown quiet on this issue. After suffering Chinese consumer backlash in March — causing missed sales, lost brand ambassadors, and censorship on TV programs — fashion names have scrubbed ties to the Better Cotton Initiative and refused to make public statements on Xinjiang cotton. Burberry, which took a hiatus from Weibo from March to July, has had an easier time bouncing back, with mainland sales jumping more than 55 percent compared to pre-pandemic levels in the first quarter. In contrast, sportswear players continue to feel the heat; in October, adidas was down 49 percent from a year ago on Tmall, while Nike saw the smallest gains from China (previously its biggest revenue driver) in Q1 2022.
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