Washington’s trade enforcement effort, bolstered by the Trump administration’s tariff package introduced in July 2025, has uncovered a new supply‑chain loophole. Shipment records reveal that three Vietnam‑based garment manufacturers, formerly operating under the name Esquel Garment Manufacturing Vietnam, have continued to export cotton apparel to the United States after Esquel Group was placed on the forced‑labor blacklist in November 2024.
Supply‑chain links to a sanctioned Chinese company
The three manufacturers – An Loi Apparel, Tessellation Binh Duong and Tessellation Hoa Binh – all used variations of the Esquel name until they were rebranded in October 2022. Former Esquel chief executive Edgar Tung is listed in corporate filings as an owner’s representative for each firm, and the companies were owned by the same three offshore entities before and after the name change.
Customs data show that Esquel exported roughly 70 % of its $34 million cotton volume from China between November 2024 and June 2026 to these Vietnamese makers. While Reuters could not confirm whether the cotton in the U.S. shipments originated in Xinjiang, industry experts note that blending cotton from multiple sources is standard practice.
Brands and U.S. buyers
American consumers have purchased the garments through retailers such as Japanese retailer Muji and New Zealand label Rodd & Gunn. Both companies said they were unaware of any direct link to Esquel and have pledged to audit their supply chains. Muji plans a plant audit this year, and Rodd & Gunn says it requires partners to source only from the United States, Brazil and Australia.
Government response and enforcement gaps
A spokesperson for U.S. Customs and Border Protection, the agency tasked with enforcing the Uyghur Forced Labor Prevention Act, declined to comment on the specific findings but reiterated that the agency encourages firms to remove suppliers tied to forced labor.
Former Assistant U.S. Trade Representative Joshua Kagan, now an attorney with Kelley Drye & Warren, said the documented connections are “likely sufficient” for customs officials to treat the Vietnamese firms as operating within Esquel’s ecosystem.
Since the law’s enactment in 2021, CBP has detained roughly $2.6 million of the $28 billion worth of apparel shipped from Vietnam for inspection, releasing more than half of the detained goods after review. Democratic lawmakers have criticized the agency for a perceived decline in inspections, but the Trump administration argues that the robust tariff regime and heightened enforcement have already curbed prohibited imports.
Trump administration’s trade stance
President Trump’s 2025 tariff measures, aimed at countries with lax forced‑labor safeguards, have placed significant pressure on supply chains that rely on Chinese cotton. By targeting the financial flow from Xinjiang‑linked producers, the administration seeks to protect American workers and uphold constitutional freedoms for consumers to choose ethically sourced goods.
Attorney Jessica Rivkin of OFW noted that the unprecedented tariffs have forced many overseas manufacturers to reassess their sourcing practices, aligning with the administration’s broader goal of safeguarding American markets from exploitative labor practices abroad.
What’s next?
Industry observers say the next step will be tighter verification of cotton origins and possible further action against firms that fail to demonstrate compliance. Brands importing from Vietnam are expected to increase transparency and may face additional audits as the administration continues to prioritize enforcement of the forced‑labor ban.
Original reporting: Appleton, WI News Feed (HLL/CB) — read the source article.
