Regulators in the United States are set to expand the scope of a now-year-old ban against goods imported from Xinjiang, China to include such electric vehicle (EV) components as lithium-ion batteries, tires, as well as raw materials like aluminum and steel. This follows recent allegations that the Chinese are using forced labor to produce items for export.
The original context of the Uyghur Forced Labor Prevention Act (UFLPA) prevents the importation of solar panels, cotton clothing, and fresh produce from Xinjiang province due to the presence of government-instituted labor camps that have essentially enslaved Muslim Uyghurs and those from other ethnic minorities.
However, reliable sources recently pointed out that forced labor from these slave camps is being used to produce necessary components for the booming EV manufacturing industry.
What Does This Mean for US Automakers?
As the US Customs and Border Protection Agency (CBP) is expected to step up the inspection of products shipped into the country for use in domestic auto assembly facilities, automotive firms that have yet to map their supply chains to see any links to Xinjiang may find themselves in hot water.
While the bulk of items confiscated by the CBP under the ban have been meant for the solar panel production sector, the agency has also detained 31 shipments meant for the automotive and aerospace industries since February of this year. So far, this has already cost both sectors around $15 million a month.
A Commitment to Transparency
As of press time, only four automotive firms and suppliers have been given a clean slate by the CBP as none of the shipments sent to them have been detained under the strictures of the UFLPA. These are Denso, Mercedes-Benz, Vokswagen, and ZF Friedrichshafen AG.
Volkswagen, in particular, made a statement regarding its continued compliance with the ban’s stipulations. As such, the automotive firm has stepped up its due diligence regarding global media screening and is likewise set to expand its supplier and buyer training on sustainability and human rights.