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The International Lawyer

The International Lawyer, Volume 57, Number 2, 2024

The Forced Labor Revolution in U.S. International Trade Law

Rakesh Bhala


  • What should the relationship be between the promotion of labor rights and the importation of foreign-origin merchandise?
  • Specifically, should America allow into its customs territory imports made with forced labor?
  • The conventional answer, evidenced by U.S. international trade law since 1930, has been a reasonably tight ban on such products.  
  • But allegations of genocide orchestrated by the Chinese Communist Party (CCP) against Uyghur Muslims in Xinjiang underscored bipartisan concern that the Section 307 ban needed tightening.
The Forced Labor Revolution in U.S. International Trade Law
Danny Hu via Getty Images

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What should the relationship be between the promotion of labor rights and the importation of foreign-origin merchandise? Specifically, should America allow into its customs territory imports made with forced labor?

The conventional answer, evidenced by U.S. international trade law since 1930, has been a reasonably tight ban on such products. But allegations of genocide orchestrated by the Chinese Communist Party (CCP) against Uyghur Muslims in Xinjiang underscored bipartisan concern that the Section 307 ban needed tightening.

The legislative response—the Uyghur Forced Labor Prevention Act, enacted on December 23, 2021, and effective June 21, 2022,—did that, and more, by creating a rebuttable presumption that any item manufactured in whole or in part in Xinjiang, or by a company connected thereto, the UFLPA revolutionized U.S. international trade law. Simply put, the UFLPA is a dramatic change evincing a new-found American commitment to root out labor rights degradations from cross-border supply chains.

I. Labor Rights and International Supply Chains

A revolution against forced labor imports is occurring in America’s international trade law. That revolution is the Uyghur Forced Labor Prevention Act (UFLPA). The UFLPA is the tightest set of measures linking trade and labor ever in U.S. history. No longer is trade a debate about how free it is, about how protectionist measures might be dismantled, or about how tariff and non-tariff barriers can be calibrated to manage imports. Thanks to the UFLPA, and to the geopolitical context of the Sino-American Trade War in which national security dominates trade policy, trade is all about supply chain management against merchandise that embodies labor rights degradations.

To be sure, under Section 307 of the Tariff Act of 1930, America has looked askance at merchandise manufactured overseas with convict, forced, or indentured labor. This statute allows U.S. Customs and Border Protection (CBP) to issue a withhold release order (WRO). But, for decades, enforcement was sparse. Bipartisan interest in promoting worker rights through trade, and elimination of the eighty-five-year-old consumptive demand exception (whereby forced labor imports were allowed if the U.S. did not have an alternative, namely domestic, supply source of the relevant merchandise), stimulated increased enforcement. But not dramatically so, and the general legal and evidentiary presumptions favoring importers remained.

Alleged genocide orchestrated by the Chinese Communist Party (CCP) against Uyghur peoples in Xinjiang changed everything. This article analyzes how and why America enacted, and now enforces with increasing vigor, the UFLPA. Simply put, herein lies the story of how and why America finally began to take the link between trade and labor seriously.

II. UFLPA Overview

In July 2021, the U.S. Senate unanimously passed the Uyghur Forced Labor Prevention Act. Thus began one of the most revolutionary changes in post-Second World War U.S. International Trade Law and Policy. The UFLPA embodied a shift in evidentiary burdens—but that almost pooh-poohs the dramatic reality. It was targeted at one country, the People’s Republic of China (PRC). It is based on human rights (which America, founded in part on a slave trade) had been hard-pressed to exalt over dollar profits. It pointed out the hypocrisy of Islamic countries that did not condemn China for its treatment of their co-religionist sisters and brothers in Xinjiang. It compelled a re-think across Corporate America about supply chains and sourcing. Additionally, the EU expanded upon the UFLPA, banning merchandise containing forced or other “bad” labor from any source.

The key provisions of America’s Senate legislation purported to “ban all goods from or made in China’s Xinjiang region unless importers can prove they weren’t made with forced labor, a move that could potentially have widespread implications for the solar industry.” It also affected supply chains for cotton, electronic components, gloves, noodles, polysilicon, printed material, shoes, textiles and apparel (T&A), tomatoes, and toys, because the Xinjiang Uyghur Autonomous Region (XUAR) was a major production center for these goods. (For example, CBP estimated in December 2021 that “about $9 billion of cotton products and $10 million of tomato products were imported from China in the past year.”) Further, the Department of Homeland Security (DHS) was tasked with “creat[ing] a list of entities who [sic] collaborate with the Chinese government in the repression of ethnic minority Uyghurs and other groups.” Significantly, the Act established a “‘rebuttable presumption’ that assumes all goods were made with forced labor,” and thus banned their importation under Section 337 of the Tariff Act of 1930, unless CBP granted an exception. Thus, the Act “shift[ed] the burden of proof to importers”—a change from the long-standing rule whereby merchandise is barred from entry only “if there is reasonable evidence of forced labor.”

In December 2021, by a 428–1 margin, the House passed the Act, albeit with some changes: The bill would require the U.S Department of Homeland Security to create a list of entities that collaborate with the Chinese government in the repression of the Uyghurs, a predominately Muslim ethnic minority, in Xinjiang, as well as other groups, and ban those goods from entering the U.S. The bill contains a “rebuttable presumption” clause that assumes all goods coming from Xinjiang are made with forced labor—and thus banned—unless the Commissioner of U.S. Customs and Border Protection gives an exception.

In short order, with minimal political tussling, the “would” became “shall,” as the bill became law.

III. Bipartisanship

That was because the lop-sided passage by both chambers “demonstrated the broad, bipartisan sentiment in Congress for the U.S. taking a harder line against China.” Indeed, the new law evinced a dramatic change in America’s rules to block imports of goods made by victims of human trafficking, despite the fact that “[t]he bill had been criticized by major companies that do business in the area [Xinjiang], including Coca-Cola, Nike and Apple.” Subsequently, the House reached compromise language with the Senate (eliminating differences in their respective versions of the bill) and passed the legislation by unanimous voice vote, which the Senate approved, and the President signed on December 23, 2021.

IV. Unpacking the UFLPA

Vitally, the final, enacted version of the Act, formally called the Uyghur Forced Labor Prevention Act, which amends the Tariff Act of 1930, retained in Section 3(a) the rebuttable presumption that all articles, goods, merchandise, and wares from Xinjiang are made with forced labor, unless an importer proves otherwise and CBP grants an exception, and thus are barred from entry into the U.S. Under Section 3(b), an importer must prove by “clear and convincing evidence” that goods are not made with forced labor to overcome this presumption and obtain the “Exception” (discussed below).

In particular, under UFLPA, CBP must apply the rebuttable presumption that any article, good, merchandise, or ware manufactured, mined, or produced wholly or in part in XUAR, or by a listed entity (discussed below), is forbidden from entry into the U.S. by the forced labor statute, Section 307 of the Tariff Act of 1930, 19 U.S.C. Section 1307, unless the importer of record has (within thirty days of the detention by CBP of the item in question): (1) “fully complied” with CBP guidance and regulations, including proper due diligence, effective supply chain tracing, and supply chain management to ensure no imports were made with forced labor in the PRC; (2) “completely and substantively responded to all inquiries” from CBP; and (3) demonstrated by “clear and convincing evidence” that the import was not made in whole or part by forced labor. As CBP officials warned: the bar for clearing imports will be “very high.”

“If there’s a part or a piece of an input that is coming from the Xinjiang region, then that shipment will be considering containing forced labor and it will not be allowed into the country,” said Elva Muneton, Acting Executive Director of the Task Force implementing the new law. Under the Act, the U.S. shall assume that anything made even partially in the western region of Xinjiang is produced with forced labor and can’t be imported unless companies can provide “clear and compelling evidence” otherwise. (The rebuttable presumption took effect 180 days after the Act entered into force, with no phase in period nor a de minimis exception. Moreover, all existing WROs became subject to UFLPA on that date, namely, June 21, 2022.) Note that a CBP determination to allow a shipment of merchandise is called an “Exception.” Section 3(c) obliges CBP to submit to Congress publicly available reports as to such exceptions (within 30 days of granting them). Query whether this reporting requirement could deter CBP from granting exceptions.

Significantly, the Act obliged DHS “to create a list of entities that collaborate with the Chinese government in the repression of the Uyghurs.” Merchandise from such entities, even if not made in XUAR, is subject to the Section 3 rebuttable presumption. That is, Section 3(a) mandated CBP to apply a rebuttable presumption that the import prohibition applies not only to goods mined, produced, or manufactured in the XUAR, but also by certain entities, regardless of origin. (To be sure, the UFLPA did not spell this point out explicitly, but it seemed to allow for such exclusions by implication from Sections 2 and 3, based on any linkage to XUAR.) The UFLPA sought to disincentivize listed entities from continuing their collaboration by denying their merchandise entry to the U.S. So, the scope of Section 3(a) covered any goods, wares, articles, and merchandise mined, produced, or manufactured wholly or in part in the XUAR, or by any listed entity.

Hence, DHS established four categories of such entities (which Section 2(d)(2)(B)(i), (ii), (iv), and (v) sets out): (1) entities in the XUAR that use forced labor, that is, entities in Xinjiang that mine, produce, or manufacture, wholly or in part, any good, wares, articles, or merchandise with forced labor; (2) entities working with the government of the XUAR to relocate Uyghurs, Kazakhs, Kyrgyz, and other persecuted groups in the PRC out of the XUAR, that is, entities working with the Xinjiang government to recruit, transport, transfer, harbor, or receive forced labor of any of these groups; (3) entities that export products that used forced labor from the PRC to America, that is, any such entities located anywhere in the world that engaged in such exports; and (4) entities or facilities that source from the XUAR or from the Xinjiang Production and Construction Corps (XPCC), or from persons working with the government of the XUAR, for the purposes of (a) “poverty alleviation,” (2) “pairing-assistance” programs, or (3) similar government labor schemes that use forced labor.

These categories constituted UFLPA Entities List (not to be confused with DOC’s export-control related Entity List). Any items, wherever produced by a firm on the Entities List were not entitled to entry into America. Manifestly, importers needed to practice due diligence and supply chain tracing, and (if they sought an exception) be prepared to adduce evidence to prove goods were not produced with forced labor.

Note two additional points about the UFLPA Entities List. First, it is updated regularly, presumably based on information—including intelligence—the U.S. government receives. The first update came in June 2023, when DHS added two entities and eight subsidiaries for working with the Xinjiang government to recruit, transport, transfer, harbor, or receive forced labor. Second, it is unclear how a firm, once listed, gets de-listed. No obvious parameters for a firm to argue for removal are in the statute. (Fortunately, in August 2022, DHS published a Federal Register notice concerning adding and removing firms to the Lists.)

Succinctly put, UFLPA was a significant, even revolutionary, change in American import policy affecting global production, that is, all imports from China or from any other country incorporating Chinese-origin materials. Producer-exporters and importers needed to pay attention to the origin of materials embedded in any merchandise proposed for entry into the U.S., with a view to any connection to XUAR, firms on the Entities List. There was no grace period—June 21, 2022, was the implementation date. There were no de minimis exceptions—any taint rendered merchandise forbidden. There were no WROs—any tainted merchandise was detained.

V. UFLPA Operation

How does UFLPA work in practice? CBP established a case-by-case process of review of each shipment entering the U.S. for UFLPA applicability: does the import originate from Xinjiang, or are any of the component parts made in Xinjiang?

CBP has five business days to make its decision. If CBP decides the shipment bears no connection to Xinjiang, hence UFLPA is inapplicable, then it releases the goods, and the importation process continues. But, if CBP finds a connection to Xinjiang (or if the five-day period expired without a CBP determination), then it blocks the goods from entry.

UFLPA gives an affected importer thirty days to challenge a CBP decision. In contrast, under other CBP actions, companies have ninety days to make their case to CBP. So, importers must act with alacrity to assemble documents in support of a challenge to the applicability of UFLPA or seek what CBP calls an “exception” under this Act. Two specific challenges are available to importers the goods of which were imperiled by a CBP prohibition from the American market: (1) an “Outside the Scope” challenge, or (2) a rebuttal of the presumption of forced labor usage, which is called an “Exception.”

First, as its rubric connotes, with an “Outside the Scope” challenge an importer argues the goods at issue are not subject to UFLPA—the Act is inapplicable to those goods. This challenge, in effect, is about origination: the importer proves the articles, or the inputs therein, have no connection to Xinjiang by showing where they actually originated. The seventeen-page Operational Guidance for Importers, which CBP issued on June 13, 2022, provides a non-exhaustive list of documents to support an “outside the scope” contention:

  1. documentation tracing the supply chain from raw materials to the imported goods;
  2. a detailed description of the overall supply chain including imported merchandise and components thereof, including all stages of mining, production, or manufacture;
  3. an explanation of the role of each entity in the supply chain, including shippers and exporters;
  4. a list of suppliers associated with each step of the production process, including names and contact information;
  5. affidavits from each company or entity involved in the production process;
  6. purchase orders, invoices, packing lists, bill of materials, certificates of origin, payment records, shipping records, manifests, and bills of lading;
  7. information about the goods (or any component thereof) concerning raw materials related to cotton, polysilicon, and tomatoes;
  8. production orders;
  9. reports on factory production capacity for the merchandise;
  10. reports on factory site visits by the importer, a downstream supplier sourcing from this factory, or a third party;
  11. evidence the volume of inputs of component materials matches the volume of output for the merchandise produced; or
  12. any other evidence to demonstrate that merchandise was not mined, produced, or manufactured wholly or in part by forced labor.

Manifestly, all such documents are evidence that merchandise or components were not mined, produced, or manufactured wholly, or in part, in Xinjiang. If the “Outside the Scope” challenge is successful, then CBP will release the merchandise at issue.

Of great importance is the evidentiary standard in an “Outside the Scope” challenge. CBP’s Guidance said that standard is not “clear and convincing,” i.e., it is not the standard the applies to the aforementioned rebuttable presumption that forced labor is involved in any items from Xinjiang. A different evidentiary standard applies to an importer seeking to prove that its shipment, in particular, has no connection to Xinjiang. What is that standard?

Suppose CBP determines the merchandise at issue is within the scope of UFLPA. Then, an importer can turn to its second option, namely, it can seek an “Exception” to UFLPA. The Act and CBP Guidance outline the three-part process for exemption, which requires: (1) full compliance with the UFLPA Strategy, i.e., the sixty-page Strategy to Prevent the Importation of Goods Mined, Produced, or Manufactured with Forced Labor in the People’s Republic of China – Report to Congress, which DHS issued on June 17, 2022; (2) responsiveness to all CBP inquiries; and (3) “clear and convincing evidence” the goods were not made in whole or part by forced labor victims.

Note that pursuant to Section 2(d)(2)(B) of the Act, the Strategy (at pages 22–25) identified fifty-two entities (including with aliases) on the Entities List as directly related to prohibited imported materials.

All of the evidence an importer may adduce in an “Outside the Scope” argument can be used for an “Exception.” In addition, the CBP Guidance and DHS Strategy documents contain a list of further evidence the importer could use to rebut the presumption of forced labor, including:

(1) evidence concerning a “Due Diligence System,” such as:

  • Mapping the supply chain, and the transportation chain, and assessing forced labor risks at each step in this chain, from raw materials to production and delivery, of the imported good.
  • A complete list of workers engaged at each step in the supply and transportation chains, including their identity, wages, and recruitment data.
  • A written supplier Code of Conduct forbidding the use of forced labor and addressing the risk of use of Chinese government labor schemes, and monitoring compliance with this Code by all suppliers.
  • Training on forced labor risks for employees and agents who select and interact with suppliers.
  • Remediation of any forced labor conditions identified with respect to a supplier, or failing that, termination of the supplier relationship.
  • Independent (i.e., third party) verification of the implementation and effectiveness of the due diligence system (for example, by a credible law firm or NGO).
  • Regular reporting of performance and public engagement publicly on the Due Diligence System.

(2) information on Supply Chain Management Measures, such as:

  • Internal controls to prevent or mitigate forced labor risk and remediate any use of forced labor identified in the mining, production, or manufacture of imported goods.
  • Demonstration that the documents provided are part of an operating system or an accounting system that includes audited financial statements.

If CBP finds “clear and convincing” evidence sufficient to rebut the presumption of forced labor, then it permits the merchandise in question to be imported into the U.S. In making this determination, CBP may resort to DNA or isotopic testing (for example, if there are differences between actual merchandise checked by, and identification numbers provided to, CBP). The Act also obliges CBP to notify Congress it has issued the exception, which (as noted earlier) could be a deterrent to such issuance.

Note one final, if obvious, point from the Guidance and Strategy documents: the time for producer-exporters and importers to start the due diligence reviews of their supply chains is now. It is not when merchandise is detained. Records should be kept well in advance of any border holdups, and should a detention occur, the import of record (IOR) will have a tight timetable to adduce evidence required to free up its merchandise.

VI. Passive Equity Investments?

One way the UFLPA did not work was to ban passive investments in companies that engage in repressive labor practices. Yet, some of the world’s largest asset management, pension, and sovereign wealth funds invest in stock index-type funds, and those indices contain shares in such companies. In November 2022, the Financial Times observed that “three major stock indices provided by index publisher Morgan Stanley Capital International (MSCI) include at least thirteen companies which have allegedly used forced labor, or have profited from China’s construction of internment camps in Xinjiang and its surveillance apparatus in recent years.” Consequently, “leading asset managers, including BlackRock, HSBC [Hong Kong Shanghai Banking Corporation], UBS [Union Bank of Switzerland] and Deutsche Bank,” plus “[p]ension funds from Canada, the U.S. and U.K.–including the Church of England’s fund–as well as Japan’s Government Pension Investment Fund and the New Zealand Superannuation Fund,” were “exposed to index funds that include companies accused of being complicit in rights violations.”

These financial institutions effectively aided and abetted forced labor by knowingly investing in indices consisting of labor-abusive companies. Misleadingly, perhaps, some of them trumpeted their ESG-friendly financial vehicles–but UFLPA did not sanction their behavior (although, arguably, some State government sanctions did).

VII. UFLPA Enforcement Statistics, Solar Panels, and Climate Change

By September 2022, the degree of rigor in enforcing UFLPA became clear: “CBP . . . said that it had detained about 1,700 shipments worth $516.3 million under UFLPA through September . . . .” For 2022 and January and February of 2023 in total, CBP denied 424 shipments (13 percent of total shipments, worth approximately $23.8 million), released 1,090 shipments (34 percent), and (as of March 2023) had 1,723 shipments under review (53 percent). As of early April 2023:

. . . the total number of stopped shipments was 3,588. Of these, 490 shipments (approximately 14%) were denied compared to 1,323 shipments (approximately 37%) that were released. The value of the total stopped shipments represented approximately $1.078 billion. The top three industries related to the stopped shipments were Electronics; Apparel, Footwear, and Textiles; and Industrial and Manufacturing Materials. With regards to country of origin, Malaysia represented the largest value of shipments at approximately $576 million and 1,042 shipments. In comparison, China represented a value of approximately $109.71 million with 1,300 shipments . . . . [These statistics indicated that Malaysian-origin per shipment values exceeded Chinese-origin ones. That is,] the average unit value of the stopped shipments from Malaysia . . . . [was] approximately $553,000 compared to $84,000 for shipments from China . . . .

All told, in the first year of UFLPA operation (June 21, 2022–June 20, 2023), CBP “apprehended nearly 4,300 shipments subject to UFLPA review or enforcement actions, with a combined value exceeding $1.3 billion” worth of goods—a giant increase from the two years before the statute took effect, with $485 million worth of goods detained in 2021 and less than $50 million in 2020. With respect to those 4,269 shipments detained between June 21, 2022, and May 31, 2023, valued at approximately $1.39 billion, over $40 million were denied entry. The aggregate annual figures continued to rise: for fiscal year 2023, CBP said it halted 4,415 shipments of merchandise suspected of being made with forced labor (4,053 of which were pursuant to UFLPA), valued at $1.46 billion. Those stops represented increases of seventy-eight percent by value and twenty-one percent by number compared to fiscal year 2022.

Indeed, per CBP’s monthly updates, these figures generally (but not uniformly) tended to trend up. For example, in June 2023, CBP identified 405 shipments worth nearly $240 million it suspected of embodying forced labor in violation of UFLPA, an increase from $197 million worth of such shipments in May. In July, CBP halted 320 shipments, worth over $68 million, based on the suspected use of forced labor. In October, CBP stopped 504 shipments worth over $199 million based on suspected use of forced labor, compared to 259 shipments valued at more than $102 million in September. In January 2024, CBP flagged $236 million worth of shipments for further examination because of suspected use of forced labor.

Likewise, periodically, DHS added new entities to the UFLPA Entity List. For instance, in June 2023, Xinjiang Zhongtai Chemical Co., Ltd. and Ninestar Corporation (plus eight of its Zhuhai-based subsidiaries) were added. In August, DHS added to that List Camel Group Co., Ltd. (because it cooperated with the XUAR government on forced labor matters), and Chenguang Biotech Group Co. Ltd. (because it sourced materials from XUAR). And, in September, DHS added three entities, Xinjiang Tianmian Foundation Textile Co., Ltd., Xinjiang Tianshan Wool Textile Co., Ltd., and Xinjiang Zhongtai Group Co., Ltd. to the UFLPA Entity List, all for involvement with forced labor and XUAR government of the Xinjiang Uyghur Autonomous Region. In December 2023, DHS added three more PRC-based companies to the UFLPA Entity List: it restricted from entry into the U.S. products made by COFCO Sugar Holding Co. Ltd., Sichuan Jingweida Technology Group Co., Ltd., and Anhui Xinyz New Materials Co. Ltd.

Notably, and notwithstanding the titular focus of the statute on XUAR, in that first year of UFLPA enforcement, “shipments from China accounted for only twelve percent of the total value of detained goods.” That is, the highest total value of shipments was not from China—it was from Malaysia, Vietnam, and then China, followed by Thailand. CBP appeared to target high-value-added shipments from developed industries.

Vietnam, and the U.S.-based brand name multinational corporations (MNCs) that used Vietnam as a TCF production-export platform, were particularly hardly hit. They all depended on inputs from Xinjiang. U.S. customs data (also as of April 2023) were revealing:

Tighter U.S. rules to ban imports from China’s Xinjiang are compounding pressure on Vietnam’s apparel and footwear makers . . . .

Among garment exporters, Vietnam has faced the worst hit from the . . . UFLPA . . . . The law, in place since June [2022], requires companies to prove that they do not use raw material or components produced with Xinjiang’s forced labor.

. . . .

Of the $15 million worth of apparel and footwear shipments held up for UFLPA checks more than 80% were from Vietnam, and only 13% of its cargoes were cleared for entry . . .

. . . .

. . . [S]upply chains [of many U.S. importers] could still be disrupted as Vietnam’s apparel makers depend on China for about half of their input materials. . . .

. . . .

The value of shipments from Vietnam that have been denied entry to the U.S. exceeded $2 million, three times more than those from China – with the sanctions having increased exponentially in the first months of this year.

While U.S. controls have been far more frequent for the electronics industry, especially for solar panels which could be made with polysilicon from Xinjiang, only 1% of electronics cargoes checked were denied entry, as opposed to 43% of apparel and footwear shipments.

In total, customs checked nearly 3,600 shipments worth more than $1 billion from a range of countries to ascertain they did not carry goods with input from forced labor in Xinjiang . . .

While the halted shipments represent a tiny portion of the $27 billion worth of garments and footwear Vietnam exported to the U.S. last year [2022], compliance risks may lead to more painful adjustments for Vietnam.

. . . .

“Vietnam’s heavy reliance on cotton textile materials from China poses a significant risk of containing Xinjiang cotton, as the province produces over 90% of China’s cotton,” Sheng Lu, Director at the Department of Fashion and Apparel Studies at the University of Delaware . . . [said].

He said it was unlikely Vietnam could drastically reduce this dependence, also because many manufacturers there are owned by Chinese investors.

. . . .

Roughly one in every three pairs of shoes that Nike and Adidas sell globally and 26% and 17% of their clothing, respectively, is made in Vietnam.

These statistics suggested third-country producer-exporters and importers had yet to adjust not only to the record-keeping requirements of upstream supply tracing, but also to the possibility of changes in ownership that would liberate them from Chinese ownership.

How many of the UFLPA-detained shipments contained solar equipment, and thus jeopardized America’s fight against climate change? The answer to that question came in November 2022:

More than 1,000 shipments of solar energy components worth hundreds of millions of dollars have piled up at U.S. ports since June [2022] under a new law banning imports from China’s Xinjiang region over concerns about slave labor . . . .

. . . .

The level of seizures . . . reflects how a policy intended to heap pressure on Beijing over its Uyghur detention camps in Xinjiang risks slowing the Biden Administration’s efforts to decarbonize the U.S. power sector to fight climate change.

U.S. Customs and Border Protection has seized 1,053 shipments of solar energy equipment between June 21, when the Uyghur Forced Labor Protection Act went into effect, and Oct. 25, . . . [and] none of the shipments have [sic] yet been released.

. . . .

. . . [T]he detained products include panels and polysilicon cells likely amounting to up to 1 gigawatt of capacity and primarily made by three Chinese manufacturers – Longi Green Energy Technology Co. Ltd . . . , Trina Solar Co. Ltd., . . . and JinkoSolar Holding Co. . . . .

Combined, Longi, Trina, and Jinko typically account for up to a third of U.S. panel supplies. But the companies have halted new shipments to the United States over concerns additional cargoes will also be detained, the industry sources said.

. . . .

The UFLPA essentially presumes that all goods from Xinjiang are made with forced labor and requires producers to show sourcing documentation of imported equipment back to the raw material to prove otherwise before imports can be cleared.

. . . .

Longi, Trina, and Jinko source most of their polysilicon from U.S. and European suppliers such as Hemlock Semiconductor, a Michigan-based joint venture between Corning Inc. and Shin-Etsu Handotai Co. Ltd., and Germany’s Wacker Chemie . . . .

In sum, the largest number of shipments UFLPA impacted involved electronics merchandise (specifically solar articles). And, obviously (given the detentions), notwithstanding that sourcing from U.S. and European suppliers, CBP was not persuaded the UFLPA presumption had been rebutted.

VIII. UFLPA Versus Section 307

Both UFLPA and Section 307 (i.e., Section 307 of the Tariff Act of 1930, as amended, 19 U.S.C. § 1307) are designed to combat forced labor. Both apply to merchandise from any country seeking entry into the U.S. But consider six distinctions between UFLPA and America’s long-standing extant prohibition on the importation of goods produced by forced labor, Section 307:

  1. Under UFLPA, there is a rebuttable presumption goods from XUAR (or listed entities) were produced by forced labor whereas under Section 307, CBP considers a determination that available information “reasonably but not conclusively indicates” goods were produced by forced labor; that is, UFLPA shifts the burden of proof from CBP to businesses with the presumption all goods made in Xinjiang, or connected to Xinjiang, are made by forced laborers and, therefore, are barred from entry.
  2. CBP does not issue WRO under UFLPA (as CBP has the rebuttable presumption in its favor that results in detention), whereas it may do so in a Section 307 action (i.e., WROs arise only in Section 307 cases).
  3. Importers have thirty days to provide the requisite evidence that merchandise is not subject to UFLPA entry ban, whereas they have ninety days under Section 307 case.
  4. UFLPA evidentiary standard for importers to rebut the presumption of forced labor inputs is “clear and convincing evidence,” whereas in a Section 307 action the general, and much lower, admissibility standard—reasonable information—laid out in 19 C.F.R. § 12.43 is used.
  5. The legal authority for CBP to detain articles under UFLPA is CBP’s general detention authority in 19 C.F.R. § 151.16, whereas in a Section 307 case it is 19 C.F.R. § 12.42(a).
  6. Unlike Section 307, UFLPA targeted certain sectors: Congress specifically directed CBP to focus on entities importing goods containing cotton (i.e., cotton and cotton products), silica-based products (including polysilicon), and tomatoes (including downstream products). Per the UFLPA Strategy (at pages 27–28), the goods with these inputs included apparel, electronics, footwear, linens, seeds, solar articles, tomato-based products and seeds, technology. Yet even this list of high-priority enforcement sectors was insufficient, because firms named in the Entities List included clothing, garments, and textiles, computer parts, electronics, hair products, rail transportation equipment, solar-grade polysilicon, and touchscreens for handheld devices and cars and other similar products. So, businesses needed to check their supply chains to determine what (if any) of its shipments were at risk of detention.

Additionally, UFLPA exempts no one. That is, some International Trade Law measures apply to businesses with a certain amount of gross revenue or employee threshold. Not so for UFLPA: UFLPA applies to all businesses of any size, and from any sector, which source goods connected to Xinjiang.

Do these distinctions suggest UFLPA indeed was a revolutionary approach to American import policy, or at least to combatting forced labor? In considering this question, compare UFLPA to Section 321(b) of the Countering America’s Adversaries Through Sanctions Act. CAATSA Section 321(b) creates a similar rebuttable presumption similar to that of UFLPA, namely, that a good mined, produced, or manufactured wholly or in part by North Korean nationals or citizens anywhere in the world was produced by forced labor and is not entitled to entry at U.S. ports, unless CBP finds that merchandise was not made with convict labor, forced labor, or indentured labor. As under ULFPA, under CAATSA, CBP allies the “clear and convincing evidence” standard—i.e., the importer of record must meet this evidentiary burden to avoid detention of its merchandise. The obvious difference between the two statutory regimes is their context: America has a near-total trade embargo with North Korea, whereas it has a robust (albeit contentious) trading relationship with China.

IX. China’s Response—No, It Does Not Bode Well

China’s response to the Senate’s initial passage of UFLPA and allegations of forced labor was predictable: first, denial, then threat. Chinese Foreign Ministry Spokesman Zhao Lijian said forced labor was the “biggest lie of the century.” He avowed that CCP policies were stimulating the XUAR economy, alleviating poverty, and fighting Islamist extremism, and added: “The U.S. side hypes up Xinjiang-related forced labor. The true motive is to damage the prosperity and stability in Xinjiang, deprive the Xinjiang people of their right to life, employment, and development.” Likewise, when the House passed its version, China’s Commerce Ministry called allegations of genocide and forced labor “vicious lies” and accused the U.S. of using them to engage in “economic bullying.” Chinese Foreign Ministry Spokesperson Wang Wenbin said, “China urges the US to get a clear understanding of the situation, immediately stop pushing the relevant bill. China is firmly resolved in defending its national interests. If the US insists on taking actions that will harm China’s interests, we are compelled to take resolute countermeasures.”

As the U.S. prepared to enforce UFLPA effective 21 June 2022 (and CBP issued Operational Guidance concerning the Act), China warned America that doing so would damage, relations between the two countries:

“If the Act is implemented, it will severely disrupt normal cooperation between China and the U.S., and global industrial and production chains,” Foreign Ministry Spokesman Zhao Lijian said . . . .

. . . .

. . . He added that “if the US insists on doing so, China will take robust measures to uphold its own rights and interests as well as its dignity.”

China urged the U.S. not to implement UFLPA, which seemed hypocritical in light of its long-standing foreign policy of non-interference in the internal affairs of other countries, though China asserted that the UFLPA did that to China (i.e., the Act was an effort to “hobble China’s development”).

Notwithstanding its rhetoric, which—predictably—included an angry admixture of accusations the U.S. was interfering in China’s internal affairs and threats to retaliate, China was on the defensive. The Congressional legislation to ban imports from Xinjiang over concerns about forced labor was coupled contemporaneously with support for a full diplomatic boycott of the February 2022 Winter Olympic Games in Beijing (which America, followed by Australia, Canada, the U.K., and Japan (regarding senior officials). And, by a 427–1 vote, the House passed “a resolution condemning the ‘ongoing genocide and crimes against humanity’ committed against Uyghurs and members of other religious and ethnic minority groups by China and calling for action at the United Nations.”

Perhaps the most serious reason why the Chinese response did not bode well for future Sino-American trade relations was a theoretical one. On the one hand, the Biden Administration sought to promote a worker-friendly trade policy. Since the May 2007 Bipartisan Trade Deal, every U.S. Administration was essentially bound to promote worker rights through trade agreements. On the other hand, like any Communist Party, the CCP is supposed to promote worker-friendly trade policies. Marxist-Leninist theory holds that free trade is fundamentally exploitative of labor, hence Communist movements must combat the capitalist tendency to maximize the extraction of surplus value from labor. The possibility of convergence of ideology—that of a capitalist, democratic regime and a communist, authoritarian regime—as to what the link between labor conditions and import permissibility should be seemed obvious. Not so.

Expressed differently, international trade is not about free trade, or even managed trade. International trade is about supply chain management. Different countries pursue sometimes similar, and sometimes different, values in the supply chains that cross foreign borders and enter their customs territories. Convergence of those values is not assured, especially when national security enters supply chain calculations.

The U.S. and China ought to share a common value of ridding their supply chains of forced labor. But that value takes subject to another one: national security. Amidst the ongoing Sino-American Trade War, each side distrusts the other, and their nationalistic impulses lead them to secure their supply chains in their own way. For the U.S., that means onshoring, friend-shoring, values-based legislation like the UFLPA, and perhaps, nascent isolationism. For China, that means rejecting any suggestion of trouble in XUAR, pursuing its ballyhooed but dubious Belt and Road Initiative (BRI), reasserting its long-standing insistence that America respect its territorial integrity and not meddle in its internal affairs, and confronting it across the Nine Dash Line and around Taiwan. Both sides seemed wont to behave as Shakespeare wrote in 1591 in Henry VI, Part 3:

“Sound trumpets! let our bloody colors wave!
And either victory, or else a grave.”