On July 31, the U.S. Department of Homeland Security, on behalf of the Forced Labor Enforcement Task Force, announced the addition of 43 Chinese companies to the so-called Uyghur Forced Labor Prevention Act (UFLPA) entity list, expanding the list to 187 entities, an increase of about 30%, marking the largest expansion ever. Effective August 3, 2026, U.S. Customs and Border Protection will presume that goods produced by these 43 entities are prohibited from entering the United States. Among the newly listed companies are several vice president units of the China Cotton Textile Association, including Shandong Weiqiao Pioneering Group, Shandong Weiqiao Textile Technology, and Henan Tongzhou Cotton Industry, directly impacting the global cotton textile supply chain.
Background
This expansion is not an isolated action. Since the Sino-U.S. trade friction in 2018, the U.S. has continuously pressured the so-called Xinjiang issue from executive, legislative, and public opinion levels. Between 2020 and 2022, the China National Textile and Apparel Council and 12 industry associations issued multiple statements against the UFLPA and the Xinjiang Supply Chain Business Advisory. This expansion came the day after a video call between the two countries' trade leaders, a timing seen as a further escalation of unilateral sanctions.
Post-expansion, affected companies face not only direct barriers to U.S. market access but also potential ripple effects from supply chain restructuring. Due to the U.S. Customs presumption rule, any downstream manufacturer using materials or products from these companies may face detention or ban risks if unable to prove supply chain compliance. This forces not only directly involved companies but also their international clients and partners to reassess procurement strategies.
It is noteworthy that the U.S. accusations of "forced labor" have long been refuted by two "Xinjiang Cotton Textile Industry Social Responsibility Reports" published in January 2021 and August 2023 by the Xinjiang Textile Industry Association, which systematically disclosed labor, wages, occupational safety, and other facts, proving no such practice exists. Yet the U.S. continues to act unilaterally under domestic law, highlighting its use as a trade weapon.
Industrial Impact
For China's cotton textile industry, the immediate impact is a surge in order risks for exports to the U.S. According to public industry data, Xinjiang is China's main cotton-producing region, accounting for about 90% of national output, with its cotton yarn and fabric supplying domestic and international markets. Once companies are listed, not only are their direct exports to the U.S. blocked, but third-party transshipment routes may also be cut, forcing the industry to accelerate "de-Americanization" strategies.
For international brands and buyers, compliance costs will rise significantly. To avoid legal pitfalls, many brands may shift orders to non-Xinjiang cotton sources or demand more rigorous supply chain traceability. This means Chinese cotton textile enterprises, especially those relying on Xinjiang cotton, may face order losses and price competition. However, given the high concentration of global cotton textile capacity in China, alternative supply cannot fully meet demand in the short term, leaving room for negotiation.
In the long run, this event will accelerate the "dual circulation" strategy adjustment of China's cotton textile industry. The domestic market's role as a fundamental base becomes more prominent, while export markets need diversification to reduce dependence on a single market. Simultaneously, supply chain transparency and traceability will become industry standards, requiring companies to invest in compliance systems to cope with potential continued sanctions.