Apple,
Nike, Adidas, and Disney under congressional pressure
By Anders Corr
May 5, 2023 Updated:
May 5, 2023
Commentary
The pressure is on for the biggest U.S.
brands, including Apple, Nike, Adidas, and Disney.
On May 2, two leading congressmen demanded that the fashion brands confirm
that their supply chains are untainted by slave labor in China. Sourcing from
forced labor in the country’s Xinjiang region, where a genocide is underway, is
now against U.S. law.
Apple is so dependent on workers and consumers
in China that on May 3, a Financial Times article called Apple a “Chinese
company.” Apple has 54 stores in China, and its chief executive officer, Tim
Cook, recently praised Apple’s side-by-side growth with the country as
“symbiotic.”
“After inking a secretive 2016 agreement to
invest $275bn in China’s economy, workforce, and technological capabilities,
the iPhone became a best-seller,” according to the article. “In reality, Apple
is now as much a Chinese company as it is American.”
The author noted the difficulty of extricating
Apple from China by shifting production to other countries. “Even small
shifts risk retaliation by Chinese overlords who might retaliate by turning
Chinese consumers against Apple products.”
At the same time, given the increasing public
realization of the threat from the Chinese Communist Party (CCP),
brand-conscious Apple managers are doing just that by reshoring manufacturing facilities to
less controversial places like India, Vietnam, Malaysia, and Ireland.
After a visit to California last month, Rep.
Mike Gallagher (R-Wis.), who chairs the House
Select Committee on the Chinese Communist Party, said that Apple and Disney
face the greatest hurdles from inevitable future economic decoupling from
China.
“Apple’s at the heart of what is the most
complex aspect of this competition, which is companies that have a massive
presence in China are going have to deal with the fact that some form of
selective economic decoupling is inevitable,” he said to Bloomberg.
Companies linked to China that have customer
bases in the United States—including Huawei, TikTok, Shein, Temu, Zoom, and Binance—are
also distancing themselves from China or seeking loopholes. Lawmakers claim
that China’s fashion companies exploit a “de minimus” loophole that waives U.S. tariffs
on imports under $800 sold directly to consumers.
Congress should close the loophole
immediately. All purchasers of goods from China should pay the same high
tariffs.
The fashion companies queried this week by the
congressmen about their China supply lines must answer questions about whether
they use materials made with slave labor in Xinjiang.
Lawmakers who demanded answers from the
fashion companies include Gallagher and Rep. Raja Krishnamoorthi (D-Ill.), the
committee’s ranking member.
They are delving deeper into allegations made
in congressional testimony from March that some U.S. companies are in violation
of the 2021 Uyghur Forced Labor Prevention Act (UFLPA), which bans products of
dubious provenance from Xinjiang. Unless companies can prove that their supply
chains in the region are squeaky clean, they are in violation of the law,
according to lawmakers.
In an escalation against the fashion
companies, the congressmen gave them a short deadline to provide information
about their materials suppliers, supplier audit policies, and other supply
chain practices.
Gallagher, former Attorney General William
Barr, and Sen. Marco Rubio (R-Fla.) have also been
critical of The Walt Disney Company. Rubio wrote an open
letter in 2020, signed by Gallagher and other lawmakers, criticizing Disney for
apparently collaborating with the CCP, including by filming parts of the movie
“Mulan” in Xinjiang. Despite the ongoing genocide, Disney apparently cooperated
with Xinjiang’s CCP propaganda and security offices.
The letter, which asked for further
information about any cooperation with the CCP, read, “The decision to film
parts of Mulan in the XUAR [Xinjiang Uyghur Autonomous Region], in cooperation
with local security and propaganda elements, offers tacit legitimacy to these
perpetrators of crimes that may warrant the designation of genocide.”
U.S. and Chinese companies are finally feeling
the heat for their unacceptable collaboration with the CCP to the point of
normalizing its totalitarian practices in China and abroad. To stop the threat
from Beijing to human rights, the United States and its allies are
unfortunately forced to accelerate economic decoupling.
While decoupling entails short-term risk to
supply chains, and could cause higher prices to consumers, it will also
increase jobs in the United States and among its allies. It will
reindustrialize our economies, making supply chains more resilient in the long
term. And doing nothing is even riskier. Limiting the economic control of the
CCP is the best option in today’s increasingly illiberal geopolitical
environment.
Views
expressed in this article are the opinions of the author and do not necessarily
reflect the views of The Epoch Times.
https://www.theepochtimes.com/china-ties-weigh-on-us-brands_5244458.html
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