On Thursday (16 January), the Ministry of Commerce of China (Mofcom) announced preliminary findings from an investigation initiated in late September, suggesting that PVH had engaged in ‘improper conduct’.
The department responsible for managing China’s Unreliable Entity List (UEL)—a countermeasure analogous to the US entity list—intends to engage in regulatory talks with the American enterprise, as per an online announcement.
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The investigation is advancing systematically and has involved multiple hearings with PVH Corp representatives, news agency Xinhua reported citing a spokesperson of the Mofcom.
Throughout the inquiry, officials have listened to the US company’s oral and written defences. The UEL department is preparing for additional conversations with PVH with the intention of making the outcomes public, said the spokesperson.
It is still unclear whether this might impact Calvin Klein and Tommy Hilfiger’s retail operations within China.
In defending its approach, the MOC emphasised that its UEL is judiciously applied and reserved for foreign entities that pose a threat to China’s national security.
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By GlobalDataThe spokesperson reassured that foreign businesses adhering to Chinese laws need not worry about their operations within the country.
Furthermore, the Chinese government continues to invite global enterprises to invest and conduct business in China, promising a stable, equitable, and predictable environment for compliant foreign companies.
Following these revelations, there was a significant downturn in PVH’s stock price, which plummeted up to 10% during intraday trading on 16 January 2025.
A spokesperson for PVH told Just Style: “As a matter of company policy, PVH maintains strict compliance with all relevant laws and regulations in all countries and regions in which we operate and in line with established industry standards and practices. We are in communication with the Chinese Ministry of Commerce and will respond in accordance with the relevant regulations.”
Since 2020, global attention has focused on cotton from Xinjiang after several Western apparel brands such as Adidas, Nike, and H&M expressed concerns about sourcing from the region due to reports of forced labour.
Amidst these tensions, the US is contemplating new tariff measures against China, with President-elect Trump threatening a 60% duty on Chinese goods.
In November last year, industry experts believed China’s move to investigate PVH for suspected violations of market trading regarding Xinjiang-related products could pose risks for other fashion brands doing business with China.
The scrutiny on PVH Corp occurs amidst the heightened international focus on forced labour issues in supply chains.
Recently, the US administration added China’s textile major Huafu Fashion, along with 25 subsidiaries, to the Uyghur Forced Labor Prevention Act (UFLPA) Entity List. This action is part of a broader effort to eradicate forced labour practices globally and specifically targets entities implicated in human rights violations against the Uighur population in Xinjiang.
The extension of the Uyghur Human Rights Policy Act beyond its original expiration date was confirmed with President Biden’s enactment of year-end legislation on 22 December 2024.
