Companies associated with blacklisted Chinese textile conglomerates employ a mix of corporate rebranding, spinning off offshore entities, and leveraging manufacturing facilities in third countries to circumvent US forced-labour import restrictions, Reuters reported.
In July, a large shipment of cotton shirts arrived at the port of Los Angeles following a voyage from southern Vietnam.
Shipment records indicate that the apparel originated from a garment manufacturer closely tied to the Chinese textile giant Esquel Group.
Since November 2024, when Washington imposed sanctions on Esquel over suspected ties to forced labour programs in China's Xinjiang region, the company has effectively been barred from selling to US customers. Esquel, based in Hong Kong, denies the allegations.
Records indicate that since Esquel was blacklisted, three garment manufacturers in Vietnam have continued sourcing most of its cotton and also sold products to the US. All three manufacturers had relationships with Esquel extending beyond a common supply chain; they all previously used variations of the name Esquel Garment Manufacturing Vietnam based on location, until they were rebranded in October 2022, Reuters reported.
Edgar Tung, who acted as Esquel's chief executive from 2021 to 2022, was also identified in corporate filings as a representative of an owner at the three manufacturers. The records indicate that the garment makers were controlled by the same three offshore companies both before and after they changed their names.
Former Assistant US Trade Representative Joshua Kagan, now a lawyer at Washington-based Kelley Drye & Warren, said the connections outlined by Reuters are “ likely sufficient” for customs officials to determine that the manufacturers function within Esquel's ecosystem, after reviewing the news agency's findings.
Notably, the Chinese textile companies face an import ban in the US over allegations of forced labour in the province of Xinjiang.
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