US targets 37 Chinese firms over Xinjiang's forced labour, escalating trade tensions

World News: The Biden administration recently issued new sanctions on 37 Chinese companies operating in the mining, solar, and textile sectors for allegedly making use of forced labor in Xinjiang. New additions to the Uyghur Forced Labor Prevention Act list unveil rising tensions pertaining to human rights practices in China.

Expansion of US trade restrictions

In a major expansion, the United States Department of Homeland Security placed 37 entities in China's mining, solar, and textile sectors on a banned export list. This represents the largest such expansion since Congress passed the Uyghur Forced Labor Prevention Act in 2021, which added companies Zijin Mining, JA Solar, and Huafu Fashion to that list. It is one of the many bans the US is imposing in a bid to suppress its trade with firms supposedly linked to forced labor in Xinjiang, the region that has gained international concerns about human rights.

The financial market reacted quickly to the news. Zijin Mining's shares fell 4.3% in early Hong Kong trading, while JA Solar and Huafu Fashion rose. The latest bans are just one of a growing list of challenges for Chinese companies as they try to find their way through complex international trade rules that are attached to human rights issues.

China's Response to Sanctions

China has reacted sternly to the bans, as Foreign Ministry spokesman Guo Jiakun termed the Uyghur Forced Labor Prevention Act an "evil" law. Beijing has promised to take decisive action in protecting the rights of its enterprises. This hot reaction is seen in the persistent tension between the US and China on trade and human rights.

Sanctions further emphasize the increasingly higher trade barriers for the Chinese solar firms which are now eyeing Western suppliers to avoid risk due to the US trade restriction. The damage is not this grave for JA Solar since one of its subsidiary firms affected by the sanctions went out of operations in 2024.