Here Comes More Supply Chain Chaos: US Ban On Xinjiang Imports Starts Today

Here Comes More Supply Chain Chaos: US Ban On Xinjiang Imports Starts Today

Here comes new proof that the Biden administration’s appetite for international economic warfare is as vast as its indifference to the collateral damage visited upon American businesses and consumers.    

Even as price inflation and product shortages are decimating President Biden’s poll numbers, the administration on Tuesday begins enforcing a new law that promises to make both problems even worse—by imposing a ban on all imports from China’s largest province. 

Effective June 21, the Biden-backed Uyghur Forced Labor Prevention Act (UFLPA) will impose a guilty-til-proven-innocent regime that bars all imports from China’s Xinjiang province unless businesses prove their products are not made with forced labor. Otherwise, their shipments will be targeted as commanding “high priority” for seizure by U.S. customs agents. 

China had previously said it would retaliate, but gave no specifics. At a Tuesday press conference, Chinese foreign ministry spokesman Wang Wenbin said the charge of forced labor is  “a huge lie made up by anti-China forces to smear” the country, and “an escalation of the US suppression of China under the pretext of human rights,” according to Bloomberg. Wang said China “will act forcefully to uphold the lawful rights and interests of Chinese companies and nationals.”

U.S. Customs and Border Protection (CBP) has already warned that the ban “will likely exacerbate current supply-chain disruptions,” with imports from all countries “subject to delays in processing time.”

The law was certain to cause havoc, but the Biden administration has compounded the chaos with its failure to provide timely instructions on how it will be enforced.

The UFLPA provided for a six-month gap between its December 23 passage and June 21 implementation, yet the CBP waited until last week to provide businesses with instructions on how to prove a negative—that is, how to convince bureaucrats that forced labor didn’t play any role in the production of a given import. 

Part of that guidance came in the form of a 68-page publication that CBP posted on Friday—just one federal business day before the ban goes live.  

According to another CBP guide, proving that a product wasn’t made with forced labor might require the creation of supply chain maps and the gathering of affidavits from every company or entity involved in the production process. 

Frustration with the Biden administration is mounting. “Our members are uncertain of what’s acceptable proof to overcome that assumption of forced labor…We’re not really getting answers [to] a lot of those questions and what we’re hearing is ‘you just have to wait’,” Eugene Laney, president of the American Association of Exporters and Importers, told Politico.

Though the ban targets Xinjiang, it could prompt seizures of products from anywhere in China, because the law applies a rebuttable presumption “that any goods mined, produced, or manufactured wholly or in part in Xinjiang” are made with forced labor and thus banned. 

The phrase “or in part” multiplies the uncertainty. As Doug Barry, a senior director at the U.S.-China Business Council, told Nikkei Asia, “The way the law is written could be interpreted as applying to other kinds of goods from other parts of China that allegedly involved forced labor at some point along the supply chain.”

Xinjiang supplies about 20% of the world’s cotton, and a wide range of other products are either made there or made with materials produced there. The new law threatens to disrupt markets for everything from solar panels to floor tiles, athletic shoes, auto parts and TV remote controls. 

This latest example of the U.S. government using a trade embargo as a political weapon springs from claims that China is forcing Uyghurs into work. Uyghurs (pronounced “wee-guhrs”) are a predominantly Sunni Muslim ethnic minority group that speaks Turkic, a language similar to Turkish. They comprise a 45% plurality of Xinjiang’s population.

For more insights on Xinjiang province and the Uyghur controversy, see our June 7 report: “Pending Embargo on Xinjiang Promises Higher Prices, More Shortages.

Tyler Durden
Tue, 06/21/2022 – 14:05

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