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Economic Watch: "Forced Labor" Act to fuel U.S. inflation, disrupt global supply chain

WASHINGTON
2022-07-20 15:20

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WASHINGTON, July 19 (Xinhua) -- The so-called "Uyghur Forced Labor Prevention Act (UFLPA)," part of a U.S. smear campaign against China, would likely push up the already-elevated U.S. inflation pressures and further disrupt global supply chain.

The legislation, which came into force in the United States in late June, presumes that all goods from China's Xinjiang Uygur Autonomous Region have been tainted by forced labor unless importers can prove otherwise.

"Such legislation as the Uyghur Forced Labor Prevention Act seems to be designed more for show than for effectiveness," Greg Cusack, a former member of the Iowa House of Representatives, told Xinhua.

"How, for instance, does someone wishing to import products allegedly made by people engaged in 'forced labor' prove that this is not so?" said Cusack.

The lack of enforcement clarity exacerbates the risk of supply chain disruptions from U.S. seizure of imports, the Politico reported.

"Our members are uncertain of what's acceptable proof to overcome that assumption of forced labor," Eugene Laney, president of the American Association of Exporters and Importers, was quoted as saying.

Products from the region are found in dozens of supply chains across the manufacturing, agriculture, apparel, energy, healthcare, and chemicals sectors, noted Marti Flacks, the Khosravi Chair in Principled Internationalism and director of the Human Rights Initiative at the Center for Strategic and International Studies (CSIS).

"At a time of unprecedented supply chain disruption, companies have expressed concern that implementation of the UFLPA will cause further tightening of the market for goods in high demand in the United States," Flacks said in a recent article.

"Such a scenario," according to a report by The New York Times, "is likely to cause headaches for companies and sow further supply chain disruptions."

If companies are forced to seek out more expensive alternatives or consumers start to compete for scarce products, the implementation of the act could also fuel the four-decade high inflation, the report said.

"The impact of this on the global economy, and on the U.S. economy, is measured in the many billions of dollars, not in the millions of dollars," Alan Bersin, a former commissioner of U.S. Customs and Border Protection, was quoted by the report as saying.

One million businesses globally buying and selling everyday products could be impacted by the new law, and the list of key industries implicated runs into thousands, according to a recent report by the Diplomat.

Cusack highlighted the ill-intentioned nature of the act. "As things are, this legislation seems more to be part of the painting of China as a 'dangerous and untrustworthy opponent' as a serious attempt to end an alleged practice with which we disagree," he told Xinhua.

"All such shouting and public posing just strikes me as making cooperation, let alone reconciliation with China less likely," said the former state legislator.

Wang Wenbin, Chinese Foreign Ministry spokesperson, recently said the whole issue of "forced labor in Xinjiang" is a huge lie concocted by anti-China forces to smear China.

Based on this lie, the "Uyghur Forced Labor Prevention Act" and U.S. sanctions on relevant entities and individuals in Xinjiang represent an escalation of the U.S. suppression of China under the guise of human rights and prove that the United States wantonly undermines the global economic and trade rules, as well as the stability of the international industrial chain and supply chain, Wang said.
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