According to a report by The New York Times, foreign companies operating in China are reportedly facing pressure to adhere to international policies boycotting Xinjiang cotton while also being subjected to investigations by the Chinese government. This delicate situation is posing significant challenges for businesses, including PVH, operating in Xinjiang, as more foreign governments, particularly in Europe and the United States, are imposing restrictions or bans on products from the region.

In response to this complex landscape, the European Chamber of Commerce in China has highlighted the dilemma faced by European companies. They are caught between the risk of opposing the Chinese government and consumers by ceasing operations in Xinjiang or facing potential backlash in domestic and international markets by continuing operations.

WilmerHale’s Beijing office has underlined the escalating concerns for multinational companies, emphasizing the possibility that increased conflict with China might occur for continental decoupling.

U.S. Senator Ron Wyden of Oregon has criticized the Chinese government for attempting to intimidate U.S. companies that comply with U.S. laws. He emphasized the importance of not allowing these coercive tactics to hinder efforts to address human rights violations in China.

*Photo reference: https://www.reuters.com/markets/us-bars-imports-26-cotton-traders-warehouses-over-uyghur-forced-labor-2024-05-16/