Embargoes and Sanctions

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    U.S. Threat to Squeeze Russia’s Economy Is a Tactic With a Mixed Record

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    Sanctions, like aiming to cut oil exports, could also hurt European allies. “It’s a limited toolbox,” one expert said.LONDON — When Russian soldiers crossed into Ukraine and seized Crimea in 2014, the Obama administration responded with a slate of economic penalties that ultimately imposed sanctions on hundreds of Russian officials and businesses and restricted investments and trade in the nation’s crucial finance, oil and military sectors.Now, with Russian troops massing on Ukraine’s border, the White House national security adviser has declared that President Biden looked Russia’s president, Vladimir V. Putin, in the eye this week “and told him things we didn’t do in 2014 we are prepared to do now.”Whether harsher measures would persuade Russia to stay out of Ukraine, however, is far from clear. Historically, economic sanctions have a decidedly mixed track record, with more failures than successes. And actions that would take the biggest bite out of the Russian economy — like trying to severely curb oil exports — would also be hard on America’s allies in Europe.“We’ve seen that over and over again, that sanctions have a hard time really coercing changes in major policies” said Jeffrey Schott, a senior fellow at the Peterson Institute for International Economics who has spent decades researching the topic. “It’s a limited toolbox.”President Biden is looking at the options available to ratchet up economic penalties against Russia.Stefani Reynolds for The New York TimesThe best chances of success are when one country has significant economic leverage over the other and the policy goal is limited, Mr. Schott said — yet neither of those conditions really applies in this case. Mr. Putin has made clear that he considers Russia’s actions in Ukraine a matter of national security. And outside of the oil industry, Russia’s international trade and investments are limited, especially in the United States.With direct military intervention essentially off the table, Biden administration officials have listed a series of options that include financially punishing Mr. Putin’s closest friends and supporters, blocking the conversion of rubles into dollars, and pressuring Germany to block a new gas pipeline between Russia and Northern Europe from opening.Work on that pipeline — called Nord Stream 2 — has been completed, but it is waiting for approval from Germany’s energy regulator before it can begin operating.Any request from Washington would coincide with a leadership change in Berlin. The new chancellor, Olaf Scholz, and his cabinet were sworn into office on Wednesday. He has not yet made any definitive statements on the pipeline. Gas reserves are unusually low in Europe now, however, and there are worries about shortages and soaring prices as winter approaches.Russia supplies more than a third of Europe’s gas through the existing Nord Stream pipeline and has already been accused of withholding supplies as a way of pressuring Germany to approve Nord Stream 2.Washington could impose much more sweeping sanctions on particular companies and banks in Russia that would more severely curtail investment and production in the energy sector. The risk of tough sanctions on a company like Gazprom, which supplies natural gas, is that Russia could retaliate by cutting its deliveries to Europe.“That would hurt Russia a lot but also hurt Europe,” Mr. Schott said.In terms of ratcheting up the pressure, James Nixey, the director of the Russia-Eurasia program at the Chatham House think tank, suggested that financially squeezing the oligarchs who help Mr. Putin maintain power could be one way of bringing more targeted pressure.“I would place a great premium on going after the inner and outer circle around Putin, which have connections back to the regime,” he said.At the moment, the swirl of ambiguity about possible United States actions is useful, he added: “It’s quite good if the Russians are kept guessing.”Russia, the United States and the European Union — which on Wednesday proposed expanding its power to use economic sanctions — are all playing something of a guessing game in order to pursue their policy goals. Russia is deploying troops on the border and at the same time is insisting on a guarantee that Ukraine won’t join NATO, while the West is warning there will be painful economic consequences if an invasion occurs.Ukrainian soldiers patrolling along the Kalmius River, which divides Ukrainian government-controlled territory from non-government-controlled areas, in November.Brendan Hoffman for The New York TimesOne of the most extreme measures would be to cut off Russia from the system of international payments known as SWIFT that moves money around the world, as was done to Iran.In 2019, the Russian prime minister at the time, Dmitri A. Medvedev, labeled such a threat as tantamount to “a declaration of war.”Maria Shagina argued in a report for the Carnegie Moscow Center that such a move would be devastating to Russia, at least in the short term. “The cutoff would terminate all international transactions, trigger currency volatility, and cause massive capital outflows,” she wrote this year.The SWIFT system, which is based in Belgium, handles international payments among thousands of banks in more than 200 countries.Since 2014, Moscow has taken steps to blunt the threat by developing its own system to process domestic credit card transactions, she noted. But it is another measure that would affect European countries more than the United States because they do so much more business with Russia.Several economic and political analysts have said restricting access to SWIFT would be a last resort.Arie W. Kruglanski, a psychology professor at the University of Maryland, said that in assessing the impact of sanctions, economists too often overlook the crucial psychological aspect.“Sanctions can work when leaders are concerned about economic issues more than anything else,” he said, but he doesn’t think the Russian leader falls into that category. To Mr. Kruglanski, strongman authoritarians like Mr. Putin are motivated by a sense of their own significance, and threats are more likely to stiffen opposition rather than encourage compromise.When it comes to Ukraine-related sanctions so far, the impact has been negligible, Mr. Nixey of Chatham House said.“A lot of these things the Russians have learned to live with, partly because implementation has been slow or poor and effects on the Russian economy are manageable,” he added.Success can be defined in various ways. Mr. Nixey said that the 2014 measures most likely deterred the Kremlin from further military interventions in Ukraine. A report for the Atlantic Council, a think tank that focuses on international relations, released this spring came to the same that conclusion.Sanctions certainly did not compel Russia to reverse its annexation of Crimea, Mr. Nixey said, but they may have persuaded Mr. Putin from taking more aggressive actions — at least until now. More

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    U.S. Signals Little Thaw in Trade Relations With China

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    The Biden administration said it would not immediately remove the Trump administration’s tariffs and would require that Beijing uphold its trade commitments.WASHINGTON — The Biden administration offered its strongest signal yet that the United States’ combative economic approach toward China would continue, with senior administration officials saying that President Biden would not immediately lift tariffs on Chinese goods and that he would hold Beijing accountable for trade commitments agreed to during the Trump administration.The comments, in a call with reporters on Sunday, provided one of the first looks at how the Biden administration plans to deal with a rising economic and security threat from China. They indicated that while Mr. Biden may have criticized the Trump administration’s aggressive approach, his White House will continue trying to counter China’s economic threats with trade barriers and other punitive measures.That includes requiring China to uphold commitments it agreed to as part of the Phase 1 trade deal that it signed with the United States in January 2020. So far, China is on pace to fall short of its 2021 purchasing commitments by more than 30 percent, after falling short by more than 40 percent last year, according to Chad P. Bown, a senior fellow at the Peterson Institute for International Economics, who tracks the purchases.However, in a move that would offer some relief to businesses that import Chinese products, the administration said it would re-establish an expired process that gives some companies a reprieve by excluding them from the tariffs. Trade officials would make those decisions based on the priorities of the Biden administration, officials said, without elaborating further.Katherine Tai, the United States trade representative, is expected to begin talking with her Chinese counterparts in the coming days about the country’s failure to live up to its agreements, senior administration officials said. Officials did not rule out the possibility of imposing further tariffs on China if talks with did not produce the desired results, warning Beijing that they would use all available tools to defend the United States from state-directed industrial policies that harm its workers.China denies that it has failed to live up to the Phase 1 agreement, contending that the pandemic has created unique circumstances.The Biden administration has been drawing up an investigation into China’s use of subsidies under Section 301 of U.S. trade law. If it is carried out, that inquiry could result in additional tariffs on China, according to people familiar with the plans.In excerpts that were released on Monday morning in Washington from a planned speech later in the morning, Ms. Tai said that, “For too long, China’s lack of adherence to global trading norms has undercut the prosperity of Americans and others around the world.”“We continue to have serious concerns with China’s state-centered and nonmarket trade practices that were not addressed in the Phase 1 deal,” she added.Last week, Gina Raimondo, the commerce secretary, pointed to China’s blocking of its airlines from buying “tens of billions of dollars” of products from Boeing.“The Chinese need to play by the rules,” Ms. Raimondo said in an interview with NPR last week. “We need to hold their feet to the fire and hold them accountable.”The Biden administration has given no indication that it plans to lower the hefty tariffs that President Donald J. Trump placed on Chinese goods anytime soon, despite protests by economists and some businesses that they have dragged on the U.S. economy.Mr. Biden has frequently criticized Mr. Trump’s 18-month trade war with China as erratic and counterproductive. But more than eight months into his presidency, Mr. Biden has announced few policies that differentiate his approach. In addition to the tariffs on Chinese goods, the president has maintained restrictions on the ability of Chinese companies to access U.S. technology and expanded the list of Chinese officials under sanctions by the United States for their role in undermining Hong Kong’s democratic institutions.Mr. Biden’s hard-line approach to China comes at a moment of extraordinary tension between the world’s largest and second largest economies, and remarkably little interchange between their governments.President Biden met with the leaders of Australia, India and Japan at the White House last month, aiming to put the major democracies of the region in agreement on how to deal with China.Sarahbeth Maney/The New York TimesIn the past month, the United States has announced a new deal to provide nuclear-powered submarines to Australia, an effort to push back on Beijing’s military modernization and its claims of territory in the South China Sea. Mr. Biden also met at the White House with the leaders of Japan, Australia and India, aiming to put the major democracies of the region in accord on how to deal with China’s influence and authoritarianism. And the United States and China are both seeking technological advantage, even if it means cutting off each other’s access to key goods.China, having repressed dissent in Hong Kong and essentially wiped away its guarantees to Britain about keeping its hands off the territory for decades, is now regularly threatening Taiwan. The United States formally protested some of China’s actions on Sunday, after dozens of military aircraft flew on Friday and Saturday into Taiwan’s air defense identification zone, although not over the island itself. While U.S. officials do not expect Beijing to move against Taiwan, they are increasingly concerned about the possibility of an accidental conflict.Trade was one area — along with climate — where mutual interest might steer the two countries to some agreements, even as they compete in other areas. But it is unclear whether they can find a way to reach an accord amid other tensions.Mr. Trump’s deal halted the trade war, but it did not put an end to economic hostilities. China still maintains tariffs on 58.3 percent of its exports from the United States; the United States imposes tariffs on 66.4 percent of the products it brings in from China, according to Mr. Bown.Some Biden officials, like many economists, have made clear that they see the tariffs as counterproductive and taking a toll on American consumers and manufacturers as well as Chinese businesses. Treasury Secretary Janet L. Yellen said in July that the China deal had “hurt American consumers.”Asked if they would consider additional tariffs on China, officials said the Biden administration would not be taking any tools off the table. The administration planned to use the enforcement mechanism established in the trade deal, they said, which would allow the United States to resort to further tariffs if consultations were unsuccessful.In a planned speech on Monday at the Center for Strategic and International Studies, a Washington think tank, Ms. Tai is set to highlight how some of Beijing’s unfair practices have affected U.S. workers and how the United States is building global coalitions to counter them.The Biden administration could face an even more difficult task in reaching any trade agreement with China than the Trump administration did four years ago. Republican lawmakers are ready to pounce on any perceived weakness on China from Mr. Biden, and diplomatic and economic relations between the two countries have deteriorated.“Against the backdrop of worldwide opposition against Cold War and division, the United States blatantly violated its policy statement of not seeking a new Cold War and ganged up to form an Anglo-Saxon clique,” Wang Yi, the Chinese foreign minister, said on Sept. 28 in response to the Australian submarine deal.The U.S. release of Meng Wanzhou, a Huawei executive who had been detained in Canada at the request of the United States, and China’s subsequent release of two Canadians and two Americans, have done little to cool tensions.Mr. Trump’s tariffs have discouraged imports of some Chinese goods, but exports to the United States have grown strongly through the coronavirus pandemic, as Americans purchased workout equipment, furniture, toys and other products during lockdown.China’s leaders have also doubled down on the kinds of domestic industrial subsidies that the United States has long objected to. They have greatly expanded programs, started more than a decade ago, aimed at eliminating their need to buy computer chips and passenger jets — two of the United States’ main exports to China — among other industrial products.The Biden administration has been exploring ways to persuade China to limit its broad industrial subsidies, but that will be difficult. The George W. Bush, Obama and Trump administrations all tried with little success for ways to coax China to abandon its long-running use of subsidies to domestic producers as a tool to wean itself from any reliance on imports.China’s leader, Xi Jinping, has called for making sure that other countries remain dependent on China for key goods, so that they will not threaten to halt their own sales to China. The United States has done so over issues like surveillance, forced labor and the crackdown on democracy advocates in Hong Kong.“The dependence of the international industrial chain on our country has formed a powerful countermeasure and deterrent capability for foreign parties to artificially cut off supply,” Mr. Xi said in a speech last year.In the call on Sunday, Biden administration officials acknowledged that talks might not persuade China to abandon its increasingly authoritarian, state-centered approach. So instead, they said, the administration’s primary emphasis will be on building the competitiveness of the U.S. economy, working with allies and diversifying markets to limit the impact of Beijing’s harmful trade practices.Keith Bradsher reported from Shanghai, and More

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    What is Going on with China, Cotton and All of These Clothing Brands?

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    A user’s guide to the latest cross-border social media fashion crisis.Last week, calls for the cancellation of H&M and other Western brands went out across Chinese social media as human rights campaigns collided with cotton sourcing and political gamesmanship. Here’s what you need to know about what’s going on and how it may affect everything from your T-shirts to your trench coats.What’s all this I’m hearing about fashion brands and China? Did someone make another dumb racist ad?No, it’s much more complicated than an offensive and obvious cultural faux pas. The issue centers on the Xinjiang region of China and allegations of forced labor in the cotton industry — allegations denied by the Chinese government. Last summer, many Western brands issued statements expressing concerns about human rights in their supply chain. Some even cut ties with the region all together.Now, months later, the chickens are coming home to roost: Chinese netizens are reacting with fury, charging the allegations are an offense to the state. Leading Chinese e-commerce platforms have kicked major international labels off their sites, and a slew of celebrities have denounced their former foreign employers.Why is this such a big deal?The issue has growing political and economic implications. On the one hand, as the pandemic continues to roil global retail, consumers have become more attuned to who makes their clothes and how they are treated, putting pressure on brands to put their values where their products are. One the other, China has become an evermore important sales hub to the fashion industry, given its scale and the fact that there is less disruption there than in other key markets, like Europe. Then, too, international politicians are getting in on the act, imposing bans and sanctions. Fashion has become a diplomatic football.This is a perfect case study of what happens when market imperatives come up against global morality.Tell me more about Xinjiang and why it is so important.Xinjiang is a region in northwest China that happens to produce about a fifth of the world’s cotton. It is home to many ethnic groups, especially the Uyghurs, a Muslim minority. Though it is officially the largest of China’s five autonomous regions, which in theory means it has more legislative self-control, the central government has been increasingly involved in the area, saying it must exert its authority because of local conflicts with the Han Chinese (the ethnic majority) who have been moving into the region. This has resulted in draconian restrictions, surveillance, criminal prosecutions and forced-labor camps.OK, and what about the Uyghurs?A predominantly Muslim Turkic group, the Uyghur population within Xinjiang numbers just over 12 million, according to official figures released by Chinese authorities. As many as one million Uyghurs and other Muslim minorities have been retrained to become model workers, obedient to the Chinese Communist Party via coercive labor programs.Burberry created signature check “skins” for characters in the Honor of Kings video game, which its owner, the Chinese technology company Tencent, removed over the company’s stand on cotton produced in the Xinjiang region.via Honor of KingsSo this has been going on for awhile?At least since 2016. But after The New York Times, The Wall Street Journal, Axios and others published reports that connected Uyghurs in forced detention to the supply chains of many of the world’s best-known fashion retailers, including Adidas, Lacoste, H&M, Ralph Lauren and the PVH Corporation, which owns Calvin Klein and Tommy Hilfiger, many of those brands reassessed their relationships with Xinjiang-based cotton suppliers.In January, the Trump administration banned all imports of cotton from the region, as well as products made from the material and declared what was happening “genocide.” At the time, the Workers Rights Consortium estimated that material from Xinjiang was involved in more than 1.5 billion garments imported annually by American brands and retailers.That’s a lot! How do I know if I am wearing a garment made from Xinjiang cotton?You don’t. The supply chain is so convoluted and subcontracting so common that often it’s hard for brands themselves to know exactly where and how every component of their garments is made.So if this has been an issue for over a year, why is everyone in China freaking out now?It isn’t immediately clear. One theory is that it is because of the ramp-up in political brinkmanship between China and the West. On March 22, Britain, Canada, the European Union and the United States announced sanctions on Chinese officials in an escalating row over the treatment of Uyghurs in Xinjiang.Not long after, screenshots from a statement posted in September 2020 by H&M citing “deep concerns” about reports of forced labor in Xinjiang, and confirming that the retailer had stopped buying cotton from growers in the region, began circulating on Chinese social media. The fallout was fast and furious. There were calls for a boycott, and H&M products were soon missing from China’s most popular e-commerce platforms, Alibaba Group’s Tmall and JD.com. The furor was stoked by comments on the microblogging site Sina Weibo from groups like the Communist Youth League, an influential Communist Party organization.Within hours, other big Western brands like Nike and Burberry began trending for the same reason.And it’s not just consumers who are up in arms: Influencers and celebrities have also been severing ties with the brands. Even video games are bouncing virtual “looks” created by Burberry from their platforms.Backtrack: What do influencers have to do with all this?Influencers in China wield even more power over consumer behavior than they do in the West, meaning they play a crucial role in legitimizing brands and driving sales. When Tao Liang, otherwise known as Mr. Bags, did a collaboration with Givenchy, for example, the bags sold out in 12 minutes; a necklace-bracelet set he made with Qeelin reportedly sold out in one second (there were 100 made). That’s why H&M worked with Victoria Song, Nike with Wang Yibo and Burberry with Zhou Dongyu.But Chinese influencers and celebrities are also sensitive to pleasing the central government and publicly affirming their national values, often performatively choosing their country over contracts.In 2019, for example, Yang Mi, the Chinese actress and a Versace ambassador, publicly repudiated the brand when it made the mistake of creating a T-shirt that listed Hong Kong and Macau as independent countries, seeming to dismiss the “One China” policy and the central government’s sovereignty. Not long afterward, Coach was targeted after making a similar mistake, creating a tee that named Hong Kong and Taiwan separately; Liu Wen, the Chinese supermodel, immediately distanced herself from the brand.The actress Zhou Dongyu, the actor Wang Yibo and the singer and actress Victoria Song, all Chinese influencers who had deals with Western brands that they then  repudiated when their products were said to disrespect the Chinese people and government.VCG/VCG, via Getty ImagesAnd what’s with the video games?Tencent removed two Burberry-designed “skins” — outfits worn by video game characters that the brand had introduced with great fanfare — from its popular title Honor of Kings as a response to news that the brand had stopped buying cotton produced in the Xinjiang region. The looks had been available for less than a week.So this is hitting both fast fashion and the high end. How much of the fashion world is involved?Potentially, most of it. So far Adidas, Nike, Converse and Burberry have all been swept up in the crisis. Even before the ban, additional companies like Patagonia, PVH, Marks & Spencer and the Gap had announced that they did not source material from Xinjiang and had officially taken a stance against human rights abuses.This week, however, several brands, including VF Corp., Inditex (which owns Zara) and PVH all quietly removed their policies against forced labor from their websites.That seems squirrelly. Is this likely to escalate?Brands seem to be concerned that the answer is yes, since, apparently fearful of offending the Chinese government, some companies have proactively announced that they will continue buying cotton from Xinjiang. Hugo Boss, the German company whose suiting is a de facto uniform for the financial world, posted a statement on Weibo saying, “We will continue to purchase and support Xinjiang cotton” (even though last fall the company had announced it was no longer sourcing from the region). Muji, the Japanese brand, is also proudly touting its use of Xinjiang cotton on its Chinese websites, as is Uniqlo.Wait … I get playing possum, but why would a company publicly pledge its allegiance to Xinjiang cotton?It’s about the Benjamins, buddy. According to a report from Bain & Company released last December, China is expected to be the world’s largest luxury market by 2025. Last year it was the only part of the world to report year on year growth, with the luxury market reaching 44 billion euros ($52.2 billion).Is anyone going to come out of this well?One set of winners could be the Chinese fashion industry, which has long played second fiddle to Western brands, to the frustration of many businesses there. Shares in Chinese apparel groups and textile companies with ties to Xinjiang rallied this week as the backlash gained pace. And more than 20 Chinese brands publicly made statements touting their support for Chinese cotton. More

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    Biden and China: Administration Rethinks Relations

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    #masthead-section-label, #masthead-bar-one { display: none }The Presidential InaugurationHighlightsPhotos From the DayBiden’s SpeechWho Attended?Biden’s Long RoadAdvertisementContinue reading the main storySupported byContinue reading the main storyBiden on ‘Short Leash’ as Administration Rethinks China RelationsThe Biden administration is under intense pressure to maintain former President Donald J. Trump’s curbs on China, even as it tries to develop a more comprehensive and effective strategy.President Biden faces an enormous challenge in trying to formulate a strategy to deal with China at a time when much of Washington treats any relations with Beijing as toxic.Credit…Doug Mills/The New York TimesFeb. 17, 2021, 2:22 p.m. ETWASHINGTON — Biden administration officials have tried to project a tough line on China in their first weeks in office, depicting the authoritarian government as an economic and security challenge to the United States that requires a far more strategic and calculated approach than that of the Trump administration.They have also tried to send a message: While the administration will be staffed by many familiar faces from the Obama administration, China policy will not revert to what it was a decade ago.These early efforts have not concealed the enormous challenge President Biden faces in trying to formulate a strategy to deal with China at a time when any relations with Beijing are treated as thoroughly toxic in Washington. Political adversaries, including Republican lawmakers, have already begun scrutinizing the statements of Mr. Biden’s advisers, ready to pounce on any effort to roll back President Donald J. Trump’s punishments, including tariffs and bans on exporting technology.Ted Cruz, the Republican senator from Texas, has placed a hold on the confirmation of Gina Raimondo, Mr. Biden’s nominee for commerce secretary, delaying a vote on her confirmation, for declining to explicitly commit to keeping the Chinese telecom company Huawei on a national security blacklist. Some Republican lawmakers have also criticized Linda Thomas-Greenfield, Mr. Biden’s pick for U.N. ambassador, for giving a speech at a Confucius Institute, an organization some have described as disseminating Chinese propaganda, and painting a rosy picture of China’s activities in Africa.Several Republicans, including Senator Charles E. Grassley of Iowa, also put out statements last week criticizing a move by the Biden administration to withdraw a rule proposed during the Trump administration that would require universities to disclose their financial ties to Confucius Institutes, organizations set up to teach Chinese language and culture in American schools.“The Biden administration is going to be on a very short leash with respect to doing anything that is perceived as giving China a break,” said Wendy Cutler, a vice president at the Asia Society Policy Institute and a former U.S. trade negotiator.Mr. Trump’s supporters credit him with taking a far more aggressive approach than his predecessors to policing China, including dusting off many rarely used policy tools. That includes placing major tariffs on Chinese goods, limiting Beijing’s access to sensitive American technology exports, imposing sanctions on Chinese officials and companies over human rights violations and securing economic concessions from China as part of a trade deal.But Mr. Trump’s critics, including many in the Biden administration, say his spate of executive orders and other actions were inconsistent and piecemeal, and often more symbolic than effective.Even as Mr. Trump issued harsh punishments on some fronts, he also extended a lifeline to the Chinese telecom company ZTE, delayed sanctions related to human rights violations in China’s Xinjiang region and publicly flattered President Xi Jinping of China as he sought his trade deal. Many of the executive actions Mr. Trump took against China were left incomplete, or were riddled with loopholes.And his policies may have worsened American competitiveness in some areas, according to a report published Wednesday by the consulting firm Rhodium Group and the U.S. Chamber of Commerce China Center. The report found steep costs from the kind of economic “decoupling” that Mr. Trump pursued, including a $190 billion annual loss in American economic output by 2025 if all U.S.-China trade was subject to the type of 25 percent tariff that Mr. Trump imposed on $250 billion of Chinese goods.Daniel Rosen, a founding partner at Rhodium Group, said the Biden administration needed to consider more than politics or ideology when forging China policy, including carefully weighing the cost of its approach to industry.“Obviously politics is king right here in this moment, with nobody in leadership or aspiring to leadership wanting to get outflanked on who is tough on China,” he said. “We’re not going to serve the American interests if we don’t consider commercial interests and national security interests at the same time.”The Biden administration has argued that by being more strategic in how it addresses China, it will ultimately be more effective than the Trump administration. It has laid out an ambitious task as it looks to not only crack down on China for what it sees as unfair trade practices but also develop a national strategy that helps build up America’s economic position to better counter Chinese competition.Speaking at the Atlantic Council in late January, Jake Sullivan, the national security adviser, said the United States first needed to “refurbish the fundamental foundations of our democracy” by dealing with issues like economic and racial inequity, as well as making investments in emerging technologies like artificial intelligence, quantum computing and clean energy.Mr. Biden has also emphasized the importance of working with allies and international institutions to impose a tougher global stance, so companies do not sidestep strict American rules by taking their operations offshore.Mr. Biden held his first call with Mr. Xi on Feb. 10, in which he talked about preserving a free and open Indo-Pacific and shared concerns about Beijing’s economic and human rights practices, according to a White House readout.In a town hall-style forum broadcast by CNN on Tuesday night, Mr. Biden, who knows Mr. Xi well from meetings during the Obama administration, said he had taken a tough line on human rights and other issues during their two-hour call.“There will be repercussions for China, and he knows that,” Mr. Biden said. “What I’m doing is making clear that we, in fact, are going to continue to reassert our role as spokespersons for human rights at the U.N. and other — other agencies that have an impact on their attitude.”Mr. Biden has begun staffing his cabinet with officials who have deep experience with China. Katherine Tai, the Biden administration’s nominee for trade representative, was in charge of litigating cases against China at the World Trade Organization during the Obama administration, and has promised to take a tough line on enforcing American trade rules.President Donald J. Trump criticizing the government of China in May at the White House. Mr. Trump’s supporters credit him with taking a far more aggressive approach than his predecessors to policing China.Credit…Erin Schaff/The New York TimesMr. Biden’s top foreign policy advisers have also espoused views critical of China’s practices, though many see potential for cooperation on issues like the coronavirus pandemic and climate change. That includes Secretary of State Antony J. Blinken, Mr. Sullivan and Kurt Campbell, the National Security Council’s “Asia czar.”Ms. Raimondo, the commerce secretary nominee, will also have purview over economic relations with China, particularly those related to technology. While she had harsh words for China during her confirmation hearing, her refusal to commit to keeping Huawei on a government blacklist drew criticism from Republican lawmakers like Mr. Cruz.Treasury Secretary Janet L. Yellen, who is expected to play a pivotal role in relations with China, took a hawkish tone at her confirmation hearing last month, vowing to use the “full array” of America’s tools to combat “illegal, unfair and abusive” practices. She has also criticized China’s practices of stealing intellectual property and subsidizing state-owned enterprises, but said she did not regard Mr. Trump’s tariffs as “the proper focus” of trade policy.The new administration has given few concrete details about how it will put its strategy into practice, including whether it will implement the many China-related executive orders Mr. Trump introduced, like new restrictions on investments in Chinese companies with ties to the military and bans on Chinese-owned apps, like TikTok, WeChat and Alipay. Instead, the administration has said it would carry out a comprehensive review of Mr. Trump’s tariffs, export controls and other restrictions before making decisions.Another uncertainty is how Mr. Biden and his team will handle Mr. Trump’s initial trade deal with China given that Beijing continues to fall short of its promise to buy hundreds of billions of dollars in American products. The administration may face the choice of using the deal’s enforcement mechanisms — which include consultations and more tariffs for Chinese products — or scrapping the agreement altogether.Scott Kennedy, a senior adviser in Chinese business and economics at the Center for Strategic and International Studies, said the Biden administration had clear foreign policy goals and a large toolbox of measures at its disposal, but had not yet “figured out how to merge strategy and tactics.”On American competitiveness with China, “there’s a much larger conversation that needs to be had,” Mr. Kennedy said. “Are they going to be willing to engage in that conversation and do that thorough analysis and come up with something new? Or are they going to be fearful of political backlash and pull their punches?”Mr. Biden’s plan to engage more closely with U.S. allies to put pressure on China may also be easier said than done.In an interview in January, shortly before he left office, Robert Lighthizer, Mr. Trump’s top trade official, pointed to a recent investment agreement the European Union signed with China, against the wishes of the Biden administration, as “the first piece of evidence” that such multilateral cooperation would be difficult.Chinese officials are already strengthening ties with U.S. allies like New Zealand and South Korea in an effort “to divide and conquer,” Ms. Cutler said.China has emerged from the early stages of the pandemic emboldened, with its factories and businesses outpacing those in the United States and Europe, where the coronavirus continues to hamper the economy. While Chinese leaders are seeking to reset relations with Washington after a tumultuous period under Mr. Trump, they have continued to make sometimes hard-edge statements.In an interview with CBS News on Feb. 7, Mr. Biden said the two countries “need not have a conflict. But there’s going to be extreme competition.”“I’m not going to do it the way Trump did,” Mr. Biden added. “We’re going to focus on international rules of the road.”Alan Rappeport More

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    U.S. Bans All Cotton and Tomatoes From Xinjiang Region of China

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    AdvertisementContinue reading the main storySupported byContinue reading the main storyU.S. Bans All Cotton and Tomatoes From Xinjiang Region of ChinaThe sweeping ban, which was based on concerns about forced labor in the region, could compel companies to reorganize their multinational supply chains.Cotton fields in the Xinjiang region of China. A new ban on imports of cotton from the area could have sweeping implications for apparel makers.Credit…Agence France-Presse — Getty ImagesJan. 13, 2021Updated 6:32 p.m. ETWASHINGTON — The Trump administration on Wednesday announced a ban on imports of cotton and tomatoes from the Xinjiang area of China, as well as all products made with those materials, citing human rights violations and the widespread use of forced labor in the region.The measure could have sweeping implications for makers of apparel and food products, many of whom have sought to distance themselves from atrocities in Xinjiang but have struggled to ensure their supply chains are free of all raw materials from the region. The area is a major source of cotton, coal, chemicals, sugar, tomatoes and polysilicon, a component in solar panels, that are then fed into factories around China and the world.The ban allows customs officials to stop imports that they suspect are made with raw materials from Xinjiang, regardless of whether they travel into the United States directly from China or through another country.China has carried out a vast crackdown on predominantly Muslim minority groups in the far west Xinjiang region, including detaining a million or more Uighurs, Kazakhs and other groups in camps and closely surveilling the rest of the population, human rights groups say.Forced labor also appears to be widespread in the region. The U.S. Customs and Border Protection said an investigation found numerous indicators of forced labor in Xinjiang, including debt bondage, restriction of movement, withheld wages, and abusive living and working conditions. The Chinese government denies the existence of forced labor in Xinjiang, saying all arrangements are voluntary.Scott Nova, the executive director of the Workers Rights Consortium, a labor rights group, called the ban “a high-decibel wake-up call to any apparel brand that continues to deny the prevalence and problem of forced-labor-produced cotton” in the region.“This ban will redefine how the apparel industry — from Amazon to Nike to Zara — sources its materials and labor,” Mr. Nova said. “Any global apparel brand that is not either out of Xinjiang already or plotting a very swift exit is courting legal and reputational disaster.”The Workers Rights Consortium estimates that American brands and retailers import more than 1.5 billion garments that use Xinjiang materials every year, representing more than $20 billion in retail sales. China is also the world’s largest tomato producer, with Xinjiang accounting for most of that production, the group says.Independent researchers and media reports have linked dozens of the world’s most prominent multinational companies to workers or products from Xinjiang, including Apple, Nike, Kraft Heinz and Campbell Soup. Campbell said it no longer sources products from the Xinjiang region.Some textile and apparel companies that used cotton or yarn from Xinjiang have announced that they are severing ties, including Patagonia, Marks and Spencer and H&M. But many firms have found it difficult to trace the origins of all the products used by their Chinese suppliers, especially given the lack of access for independent auditors to facilities in Xinjiang.The order will “send a crystal-clear message to the trade community: know your supply chains,” said Mark Morgan, the acting commissioner for U.S. Customs and Border Protection. Importers are required to ensure that their own supply chains are free from forced labor, he added. “It’s the law.”The Trump administration has added increasingly restrictive measures on Xinjiang, including placing sanctions on dozens of companies and individuals over alleged human rights violations.In December, customs officials announced a ban on cotton products made by the Xinjiang Production and Construction Corps, an economic and paramilitary group that produces much of the region’s cotton. U.S. Customs and Border Protection has already detained 43 shipments valued at more than $2 million under that ban, officials said Wednesday.Congress is also considering sweeping legislation that would block imports from Xinjiang, unless companies are able to prove that supply chains that run through the region are free of forced labor.While the United States has taken the most forceful action on this front, both Canada and Britain introduced rules this week to limit goods linked to Xinjiang from entering their countries.Despite growing concerns over Chinese practices in the region, exports from Xinjiang to the United States and Europe grew significantly from 2019 to 2020, according to the Center for Strategic and International Studies.But trade experts say the new measures will raise questions about whether customs officials are equipped to fully enforce such a wide ban, which will require tracing Xinjiang materials through supply chains around the world.A report published in October by the U.S. Government Accountability Office found that customs suffered from staff shortages and other issues despite a new division and resources devoted to blocking goods made with forced labor.In a call with reporters on Wednesday, Brenda Smith, the executive assistant commissioner at Customs and Border Protection’s Office of Trade, said it was “a challenge to be able to link what we see arriving in a port of entry back to the raw materials produced in Xinjiang.” The department is applying new tracking methods to uncover products made with forced labor, she said.The department is increasingly making use of new technologies, like pollen analysis, to try to identify cotton and other materials from Xinjiang in foreign products, officials said.AdvertisementContinue reading the main story More

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    Chinese Solar Companies Tied to Use of Forced Labor

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    AdvertisementContinue reading the main storySupported byContinue reading the main storyChinese Solar Companies Tied to Use of Forced LaborA new report shows some of the world’s biggest solar companies work with the Chinese government to absorb workers from Xinjiang, programs that are often seen as a red flag for forced labor.Solar panels in Clovis, Calif. Together, the solar companies named in the report supply most of the raw materials for solar panels on rooftops and utility energy projects in the United States, Europe and elsewhere.Credit…Chang W. Lee/The New York TimesAna Swanson and Jan. 8, 2021, 1:47 p.m. ETIn a flat, arid expanse of China’s far west Xinjiang region, a solar technology company welcomed laborers from a rural area 650 miles away, preparing to put them to work at GCL-Poly, the world’s second-largest maker of polysilicon.The workers, members of the region’s Uighur minority, attended a class in etiquette as they prepared for their new lives in the solar industry, which prides itself as a model of clean, responsible growth. GCL-Poly promoted the housing and training it offered its new recruits in photographs and statements to the local news media.But researchers and human rights experts say those positive images may conceal a more troubling reality — the persecution of one of China’s most vulnerable ethnic groups. According to a report by the consultancy Horizon Advisory, Xinjiang’s rising solar energy technology sector is connected to a broad program of assigned labor in China, including methods that fit well-documented patterns of forced labor.Major solar companies including GCL-Poly, East Hope Group, Daqo New Energy, Xinte Energy and Jinko Solar are named in the report as bearing signs of using some forced labor, according to Horizon Advisory, which specializes in Chinese-language research. Though many details remain unclear, those signs include accepting workers transferred with the help of the Chinese government from certain parts of Xinjiang, and having laborers undergo “military-style” training that may be aimed at instilling loyalty to China and the Communist Party.The Chinese government disputes the presence of any forced labor in its supply chains, arguing that employment is voluntary. The companies named in the report either did not respond to requests for comment or denied any role in forced labor.In a statement, a representative for the Chinese Embassy in Washington called forced labor in Xinjiang “a rumor created by a few anti-China media and organizations,” adding that all workers in Xinjiang enter into contracts in accordance with Chinese labor law. “There is no such thing as ‘forced labor,’” the representative said.The report adds to a growing list of companies that have been accused of relying on coerced labor from Uighurs and other ethnic minorities in China, either in their own factories or those of their suppliers.The United States and other governments have become increasingly vocal about forced labor in Xinjiang, including naming and shaming major corporations that operate in the region. The Trump administration has imposed sanctions on dozens of companies and individuals for their role in Xinjiang, including banning some exports from the region, which is also a major producer of cotton. On Dec. 2, it banned imports made with cotton produced by the Xinjiang Production and Construction Corps, a paramilitary group that American officials say uses forced labor.Congress is also considering sweeping legislation that would ban all products with materials from Xinjiang unless companies certify that the goods are made without forced labor.John Ullyot, the spokesman for the National Security Council, said that China’s campaign of repression in Xinjiang involved “state-sponsored forced labor” and that the United States would “not be complicit in modern day slavery.”“The administration has taken unprecedented actions to prevent China from profiting off of its horrific human rights abuses,” he said.Together, the solar companies named in the report supply more than a third of the world’s polysilicon, which is refined from rock and turned into the solar panels that end up on rooftops and utility energy projects, including those in the United States and Europe.Government announcements and news reports indicate that solar companies often take in assigned workers in batches of dozens or fewer, suggesting that the transfers are a small part of their overall work force. Still, the assertions from Horizon Advisory imply that much of the global solar supply chain may be tainted by an association with forced labor. Such charges could hurt its progressive image and risk product bans from Washington.GCL-Poly, Daqo New Energy, Xinte Energy and East Hope Group did not respond to multiple requests for comment.Ian McCaleb, a spokesman for Jinko Solar, said the company “strongly condemns the use of forced labor, and does not engage in it in its hiring practices or workplace operations.” He said that it had reviewed the claims in the Horizon report and “found that they do not demonstrate forced labor in our facilities.”Business & EconomyLatest UpdatesUpdated Jan. 7, 2021, 12:58 p.m. ETElon Musk has become the world’s richest person, as Tesla’s stock rallies.Simon & Schuster drops Senator Hawley’s book.Daimler responds: ‘We depend on a reliable and stable political framework.’China carries out a vast program of detention and surveillance of Uighurs, Kazakhs and other minorities in Xinjiang. Up to a million or more minorities may have been detained in indoctrination camps and other sites where they are forced to renounce religious bonds, and risk torture, assault and psychological trauma, Uighurs abroad and human rights groups say.The Xinjiang government has promoted the labor transfer programs in parallel with the re-education camps, efforts that have ramped up drastically under the current leader, Xi Jinping. The government has uprooted many from farms to work in factories and cities, in the belief that steady, supervised work can pull minorities out of poverty and break down cultural barriers. Workers may have little choice but to obey local officials who oversee their move to distant towns and industrial zones to fulfill government-set quotas.An internment camp in Xinjiang that local officials have portrayed as a vocational training center.Credit…Thomas Peter/ReutersThe growing scrutiny of the region has already prompted changes among some companies whose supply chains are entangled in these programs. Many textile and apparel companies that use cotton or yarn from Xinjiang have severed ties, including Patagonia, Marks and Spencer and H&M.The solar sector could face similar pressure. The industry has deep ties to Xinjiang, which accounts for about 40 percent of global polysilicon production, said Jenny Chase, the head of solar analysis at BloombergNEF. Xinjiang’s polysilicon production increased rapidly over the past decade, mostly because of cheap electricity from local coal plants and other government support, Ms. Chase said.That expansion has helped Chinese companies dominate foreign competitors, including in the United States. China produced 82 percent of global polysilicon in 2020, up from 26 percent in 2010, according to data from IHS Markit, while the U.S. share of production shrunk to 5 percent from 35 percent.“I am concerned that forced labor may have been used in Xinjiang,” said Francine Sullivan, the vice president for business development at REC Silicon, a Norwegian polysilicon manufacturer with operations in the United States. The company shut a facility in Washington State, despite surging overall U.S. demand.Xinjiang is known for low safety and environmental standards, Ms. Sullivan said, and forced labor “may be just part of the incentive package.”Xiaojing Sun, a senior research analyst at Wood Mackenzie, said solar companies were starting to investigate their exposure to Xinjiang and reconfigure their supply chains to avoid the region if possible.In a note to investors in October, analysts at Roth Capital Partners said the solar sector faced a “heightened risk of disruption” because of its ties to Xinjiang.“Investors are getting nervous,” Ms. Sun said.The Solar Energy Industries Association, the largest industry association in the United States, has called human rights abuses in Xinjiang “reprehensible” and strongly encouraged companies “to immediately move their supply chains out of the region.”Since unfettered on-the-ground access to Xinjiang for foreign journalists and researchers is virtually impossible, the Horizon Advisory researchers do not provide direct testimony of forced labor. Instead, they present signs of possible coercion from Chinese-language documents and news reports, such as programs that may use high-pressure recruitment techniques, indoctrinate workers with patriotic or military education, or restrict their movement.The report documents GCL-Poly accepting “surplus labor” from a rural region of Xinjiang last year. In 2018, according to an article on China Energy Net, a local news site, one of GCL-Poly’s subsidiaries also accepted more than 60 such workers.A local subsidiary of Jinko Solar, Xinjiang Jinko Energy Co., received state subsidies for employing local Xinjiang labor, including at least 40 “poor workers from southern Xinjiang” in May, according to a local government announcement from July 2020 cited by Horizon Advisory.On its public WeChat account, East Hope Group said that it had “responded to the national Western Development Call and actively participated in the development and construction of Xinjiang,” including constructing a polysilicon project in Changji prefecture in 2016, the Horizon report said.That same year, according to a Chinese news report cited by Horizon, Xinjiang’s Yarkand County signed a “labor export cooperation framework agreement” with a subsidiary named East Hope Group Xinjiang Aluminum Company.Another subsidiary of East Hope, Xinjiang East Hope Nonferrous Metals Co., “accepted 235 ethnic minority employees from southern Xinjiang,” who were given training to make up for “low educational qualifications, weak national language skills and insufficient job skills,” according to a report on the company’s website.According to Horizon Advisory, several solar companies also have ties to the Xinjiang Production and Construction Corps, which has been penalized by the Trump administration. In its 2018 financial report, Daqo New Energy said its Xinjiang facilities benefited from a lower cost of electricity because the regional grid is operated by a division of the Xinjiang Production and Construction Corps.Amy Lehr, the director of the Human Rights Initiative at the Center for Strategic and International Studies, said that work programs that draw on Xinjiang minorities and offer companies subsidies for employing them are a “red flag” for forced labor.These programs may restrict workers from quitting, traveling or participating in religious services, pay less than minimum wage, and involve harsh or unsafe work conditions, as well as the threat of detention, according to Ms. Lehr’s research.“The concern is that there is a potential for coercion, because of the level of surveillance and fearfulness,” Ms. Lehr said. Companies that source products from the region have “no way of knowing that you’re not being connected to forced labor,” she said.Nathan Picarsic, a founder of Horizon Advisory, said what the firm had documented was likely “just the tip of the iceberg.” If Americans are buying solar panels made with materials from these Chinese companies, he said, “I would say you are complicit in perpetuating this Chinese industrial policy that suppresses and disenfranchises human beings.”AdvertisementContinue reading the main story More