The forced-labour law has become America's most flexible trade weapon

THE AMERICAN law that was supposed to stop forced labour in China's Xinjiang region has quietly morphed into something else: the most versatile trade barrier in Washington's arsenal. On July 31st the Department of Homeland Security added 43 Chinese companies to the Uyghur Forced Labour Prevention Act entity list, the single largest expansion since the statute took effect in June 2022. The total now stands at 187, a 30% increase in one swoop. Goods from the new entries are barred from US ports beginning on August 3rd. The action is the first time companies have been added to the list under the Trump administration.

To be sure, the humanitarian premise is real. The US and a range of investigative bodies have documented China's internment of Uyghurs and other Muslim minorities in Xinjiang, alongside state-sponsored labour transfer programmes that move workers out of the province under coercive conditions. China denies the allegations. The law itself is not controversial in principle: goods made with coerced labour should not enter American markets.

The trouble is what the law has become in practice. The newest additions span sectors that had little obvious connection to the Xinjiang labour controversy. Nine pharmaceutical companies make the list, including Xinjiang Nuziline Bio-Pharmaceutical and Nanjing Lilai Pharmaceutical, which have been linked to conjugated estrogens. Zhengzhou Synear Food, a maker of frozen dumplings and wontons based in Henan province, was listed for accepting Uyghur workers transferred out of Xinjiang. Hunan Aihua Group, one of China's largest manufacturers of aluminium electrolytic capacitors, was added despite being headquartered in Hunan. Fujian Septwolves, an apparel company, was listed for using Xinjiang cotton. Shandong Gold Mining was listed for its operations in Xinjiang, even though its smelting is in Shandong.

The pattern is significant. Forty-one of the 43 new entries were listed for sourcing materials from Xinjiang through state-sponsored labour programmes. Only four were listed for directly participating in Xinjiang labour transfers. The net has expanded from a regional human-rights measure into a supply-chain instrument: any company, anywhere in China, that touches Xinjiang-sourced cotton, copper, lithium or tomatoes is now at risk.

The mechanism that makes this possible is the law's rebuttable presumption. Once a company is on the entity list, US Customs and Border Protection assumes its goods were made with forced labour and detains them at the port. The importer then bears the burden of producing clear and convincing evidence to the contrary - documentation tracing back to raw materials. A tariff raises a landed cost that can be calculated and passed on. A detention stops goods entirely, while the importer's inventory sits idle and the customer's order waits.

The enforcement numbers show the presumption is no fiction. Customs and Border Protection has denied entry to more than 24,300 shipments under the law, valued at nearly $1 billion, according to the Department of Homeland Security. In fiscal year 2025, the agency stopped around 7,325 shipments for review, a 50% increase on the previous year. Only about 6.5% of those were ultimately released into US commerce, according to analysis by Troutman Pepper, a law firm. The low release rate suggests the presumption is, in practice, close to conclusive.

The broader context is a trade war fought on two tracks. On one side are tariffs: blunt, visible, politically easy to announce. On the other are forced-labour rules, export controls and entity lists: more opaque, harder to challenge in trade tribunals and easier to defend because they carry a humanitarian veneer. The UFLPA has become the preferred instrument for raising costs on Chinese supply chains without triggering the same political backlash as a headline tariff. Washington gets to claim it is protecting Uyghurs; American consumers end up paying for diversification.

China has responded in kind. In February 2025, Beijing imposed export restrictions on tungsten, tellurium, bismuth, indium and molybdenum - metals used in defence, clean energy and electronics - minutes after a new round of American tariffs took effect, according to Reuters. The United States stopped mining tungsten in 2015 and has not produced refined bismuth since 1997, according to US Geological Survey data. Later in 2025, China restricted exports of heavy rare earth elements and permanent magnets, threatening to halt automotive and aerospace manufacturing across the United States, Europe and Japan, as documented by the CSIS, a think-tank. A fragile 90-day truce followed, then stricter controls, then a one-year suspension agreed at a Trump-Xi summit. Even under the truce, Chinese exports of rare earths to the US remain volatile and below pre-restriction levels.

The result is a familiar one. Both sides are building walls. The US blocks goods at the border; China restricts raw materials at the source. Neither can claim a clean hand. American companies face higher costs as they reconfigure supply chains away from Xinjiang-linked inputs. Chinese companies face exclusion from the world's largest consumer market. The global trading system that once moved materials freely now requires lawyers, auditors and compliance officers at every node.

The danger is not that the UFLPA is targeting the wrong companies. The evidence for coercive labour in Xinjiang is substantial and warrants scrutiny. The danger is that the law's expanding scope makes it harder to distinguish between legitimate enforcement and strategic trade restriction. When a Henan dumpling company and a Fujian sportswear maker appear alongside genuine Xinjiang-based aluminium and cotton producers, the humanitarian purpose gets obscured. The tool becomes a trade weapon, and trade weapons tend to be permanent.

A wiser approach would separate the two aims. If the objective is to protect workers, focus enforcement on companies with credible evidence of forced labour and maintain transparent criteria for listings. If the objective is to reduce reliance on Chinese supply chains, call it industrial policy, price the subsidy honestly and accept the costs. Blending the two confuses neither Washington nor Beijing - both see what is happening - but it entrenches a tool that is hard to roll back because doing so would look like abandoning Uyghurs.

The 43 new names on the list are not the end of the story. They are a demonstration of capacity. Every Chinese firm that sources Xinjiang materials now has reason to worry about tomorrow's Federal Register notice. That is precisely the kind of uncertainty that drives supply-chain diversification. It is also precisely the kind of uncertainty that raises costs for American consumers and businesses that depend on Chinese inputs. The UFLPA was supposed to stop coercion. It has become something broader, and more consequential. That bargain is not the one Congress intended.