Uyghur Forced Labor Prevention Act on Supply Chain
On June 21st, 2022, the Uyghur Forced Labor Prevention Act went into effect. This law will ensure that goods made with forced labor in the Xinjiang Uyghur Autonomous Region (XUAR) of the People’s Republic of China do not enter the United States market.
This affects any item exported out of Xinjiang made with forced mass labor, including electronics products, food, shoes, and textiles. This law requires a significant number of companies sending goods into the United States to comply with disallowing forced labor.
Global Impact of Xinjiang Uyghur Exports
The Xinjiang Uyghur region produces large amounts of raw materials and processed goods, including petroleum, cooking oils, nuclear fuel, natural gas, electricity, metal smelting, raw chemical manufacturing, food products (namely fruits and tomato paste), textile goods, and electrical/electronics goods.
Xinjiang controls approximately 45% of the global silicon production for electronics chips and another 20% of the world’s total cotton supply. In 2019, Xinjiang global exports business totaled over $18 Billion USD.
Specifically for the electronics and semiconductor industries, this may lead to a temporary spike in chip shortages as fabrication facilities look to source silicon from other suppliers.
Global Pressure to Ban Forced Labor
Not only did the United States sign a ban on China’s Xinjiang export goods created with forced labor of ethnic minorities, but the US Department of Labor has created a list of goods from certain countries that are banned. In July 23 of 2021, this List of Goods Produced by Child Labor or Forced Labor contained 155 goods from 77 countries.
Additionally, the European Union has called for an investigation into a regulation effectively banning products produced, extracted, or harvested with forced labor. This initiative was completed on June 20, 2022.
How to Track Impact on Global Supply Chain
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