$74 million worth of electronics, mostly consisting of solar panels and microchips, have been denied entry into the United States. The unprecedented move, based on official data, reveals heightened scrutiny of possible links to forced labor in China. The affected shipments, mainly from Malaysia and Vietnam, have faced extensive screening or rejection by US customs authorities.
The development is the result of tougher US regulations introduced in June 2022 to combat human rights violations in China’s Xinjiang region, home to the predominantly Muslim Uyghur minority. Since their implementation, these regulations have resulted in controls on more than 6,000 shipments with goods valued at more than $2 billion through September.
Alarmingly, nearly half of these shipments have been denied entry or are still pending approval. In September alone, a significant increase was seen, with shipments worth $82 million rejected or held for further investigation. It should be noted that 90% of these shipments were electronic, which represents a substantial increase compared to the previous month.
More than two-thirds of the rejected or detained shipments come from Malaysia and Vietnam, both top exporters of solar panels and semiconductors to the United States. Vietnam, in particular, is a leading supplier of textiles, footwear and apparel.
It is important to note that Xinjiang, the region at the center of these concerns, is a major producer of cotton and polysilicon, crucial raw materials used in photovoltaic panels and semiconductors. Since the new US regulations took effect, Malaysia and Vietnam have seen approximately $320 million of their cargo denied entry or held for inspection. This figure is almost three times higher compared to China itself.
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