Implemented in June 2022, the Uyghur Forced Labor Prevention Act (UFLPA) prohibits U.S. companies from importing apparel wholly or in part produced in China’s Xinjiang region. UFLPA could significantly alter U.S. apparel import patterns as fashion companies have begun or anticipate adjusting their sourcing base to comply with the law and mitigate the forced labor risks in the supply chain.
This study quantitatively evaluated the impacts of the UFLPA on U.S. apparel imports nearly two years after the law’s implementation. Unlike existing studies primarily focusing on UFLPA’s political or legal aspects, this study’s findings would enhance our understanding of the economic and trade implications of the new law.
A panel regression model was adopted to evaluate the quantitative impact of UFLPA on U.S. apparel imports based on data collected from OTEXA (2024) and USITC (2024), the most authentic government data source. Four countries in three categories were included in the study: 1) China; 2) Vietnam and Bangladesh representing top Asian apparel exporting countries other than China; 3) member countries of the Central America Free Trade Agreement (CAFTA-DR) representing near-shoring sourcing destinations. The annual trade activities of these four countries from 2010 to 2023 (the latest available) were used for the analysis.
The panel regression model suggests several interesting findings*:
Firstly, the results showed that holding other factors constant, U.S. cotton apparel imports from China decreased significantly by approximately 350 million square meter equivalent (SME) annually following UFLPA’s implementation. In other words, the result confirmed that UFLPA had negatively affected U.S. cotton apparel imports from China. This result is far from surprising as Xinjiang accounted for nearly 90% of China’s cotton production, causing significant forced labor risks associated with importing cotton apparel from China.
Secondly, holding other factors constant, U.S. cotton apparel imports from Vietnam and Bangladesh and CAFTA-DR also respectively decreased by approximately 81 million SME, 51 million SME, and 20 million SME annually after UFLPA’s implementation in 2022. The results revealed U.S. fashion companies’ concerns about UFLPA compliance risks associated with sourcing from countries other than China, particularly Asia, due to their heavy reliance on cotton yarns and fabrics from China through a highly integrated regional supply chain.
Thirdly, the results revealed a more significant positive relationship between U.S. cotton exports to China, Vietnam, Bangladesh, and CAFTA-DR countries and U.S. cotton apparel imports from these countries after UFLPA’s implementation. Related, trade data also showed a declining ratio of U.S. cotton apparel imports from China, Vietnam, Bangladesh, and CAFTA-DR countries relative to these countries’ cotton imports from the U.S. This pattern implies a closer alignment in the trade flow of raw cotton from the U.S. to these countries and the return of finished cotton apparel to the U.S. It could be the case that leading apparel exporting countries increasingly used US cotton after UFLPA to mitigate the forced labor risks.
Additionally, there was a negative relationship between U.S. cotton apparel imports from China, Vietnam, Bangladesh, and CAFTA-DR members and U.S. MMF apparel imports from these countries. In other words, cotton apparel and MMF apparel appear to compete within the total U.S. apparel import market. However, UFLPA’s implementation has not significantly impacted the relationship. Nonetheless, MMF apparel has accounted for a growing share of China’s total apparel exports to the United States after UFLPA’s implementation (down from 46% in 2010 to only 19% in 2023).
The study’s findings revealed a broad trade impact of UFLPA’s implementation that goes far beyond China. Notably, cotton apparel exporters from other Asian countries and those in the Western Hemisphere also appeared to be negatively affected by the new law. Also, unlike theoretical prediction, no clear evidence shows that UFLPA has significantly expanded the near-shoring of U.S. cotton apparel imports from the Western Hemisphere, such as CAFTA-DR members.
Meanwhile, the results call for further investigation of the net impact of UFLPA on U.S. cotton exports. While UFLPA may help U.S. cotton gain more shares in the global marketplace, the reduced U.S. import demand for cotton apparel due to forced labor risk concerns may also unexpectedly “shrink the pie size.”
*:The fixed effects (FE) model was selected for the study based on the likelihood ratio test results (p<.01). The result of the F-test suggests the FE model is statistically significant at the 99% confidence level (p<.01). The value of R2 exceeds 0.90, indicating an overall high goodness-of-fit of the panel regression. All the independent variables were statistically significant at the 99% confidence level (p<.01).
By Sheng Lu and Emilie Delaye
Note: The study will be presented at the 2024 International Textile and Apparel Association (ITAA) annual conference in November 2024.
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FASH455 Global Apparel & Textile Trade and Sourcing 
While China is the lowest importer of cotton I am surprised that we are still importing cotton from here as well as the fact that it has remained stagnant since 2022. I find this quite compelling since everyone especially fashion policy makers know that most cotton from China comes from Xinjiang. Xinjiang cotton is produced with forced labor and this is not a secret. I would think with this new policy we would see less than what the graph is describing above.
I found it interesting to read the study on How Has the Uyghur Forced Labor Prevention Act (UFLPA) Affected U.S. Apparel Imports? This new study highlights the significant impacts of the Uyghur Forced Labor Prevention Act (UFLPA) on U.S. apparel imports, particularly cotton apparel from China. Since its implementation in June 2022, the UFLPA has led to a notable decline in U.S. imports of cotton apparel from China, as Xinjiang, a region heavily linked to forced labor practices, accounted for nearly 90% of China’s cotton production. The study’s findings are crucial for understanding the broader economic and trade effects, as the law has not only impacted China but also other major apparel exporters, such as Vietnam, Bangladesh, and countries in the CAFTA-DR region, which rely on Chinese cotton for manufacturing.
Something I found especially interesting in this study is the unintended impact of the UFLPA on countries other than China. While the law specifically targets forced labor concerns related to Xinjiang cotton, the findings show that apparel imports from Vietnam, Bangladesh, and CAFTA-DR countries are also affected by this. I conclude that the reasoning for this is because these countries rely on Chinese cotton yarns and fabrics in their supply chains, which could indirectly involve forced labor risks. This is a prime example of how dependent global supply chains are and how policies targeting one region can have a ripple effect on many others.
The passage of the ban on Xinjiang cotton has been in the news (and discussed in fashion classes) since it was first introduced, mainly on how difficult it is to truly enforce the law. Many companies try to circumvent the ban by importing the material into different countries to be manufactured. So, it is interesting to see these suspicions proven true in the study. It was also surprising to find that countries under CAFTA-DR were negatively affected by the law, even with the duty-free benefits that come with cotton sourcing from the US instead of from Asian countries. But given the positive relationship between the US cotton exports and US cotton apparel imports, it’s not unreasonable to think that these losses will ultimately stabilize in the coming years as countries start sourcing more heavily from the US. Of course, that assumes that companies are investing further in nearshoring efforts with CAFTA-DR, which the study concludes as false. It’d be interesting to see if the general usage of cotton products will decrease in favor of different fibers like Tencel (or rayon or viscose) or petroleum-based synthetics (nylon, polyester, etc.). Or if there will be a rise in cotton blends.
The study on the UFLPA reveals some unexpected impacts on U.S. apparel imports. While the law targeted China, it also deeply affected imports from countries like Vietnam and Bangladesh, which rely a lot on Chinese cotton. Fashion companies are reducing sourcing from these countries to avoid compliance risks. This shows how interconnected global supply chains are, especially in the cotton industry, and how UFLPA has created broader trade effects beyond China. Additionally, U.S. cotton exports to countries like Vietnam and Bangladesh have increased, but reduced U.S. demand for finished cotton apparel may offset the potential benefits, signaling a complex trade dynamic. I also noticed from the blog that UFLPA has not drastically impacted the import of MMF apparel despite a rise in MMF exports from China to the U.S. This could be a way for manufacturers to avoid forced labor risks associated with cotton. Additionally, the anticipated increase in near-shoring, especially from CAFTA-DR countries, hasn’t taken shape as expected. This suggests that factors like cost, infrastructure, and trade regulations still limit sourcing decisions. Overall, the study provides important insights into the economic and trade implications of UFLPA, showing that its effects go beyond China and are reshaping the global apparel trade.
This blog post offers a compelling analysis of the UFLPA’s impact on the global apparel trade, highlighting the complexity of supply chain interconnections. One key takeaway is how countries like Vietnam and Bangladesh, despite not being directly tied to Xinjiang, experienced declines in U.S. imports due to their reliance on Chinese cotton. This emphasizes the ripple effects within integrated supply chains.
Additionally, the UFLPA has not significantly promoted near-shoring to regions like CAFTA-DR, contrary to expectations. Regional integration and cost efficiency appear to remain dominant factors in sourcing decisions.The shift in U.S. cotton exports aligning with finished apparel imports is another intriguing insight, raising questions about whether this trend will benefit U.S. cotton producers in the long term. Overall, this analysis gives a clear picture of how the UFLPA is affecting trade and supply chains. It also raises important questions about how these changes might help or hurt U.S. cotton producers in the future.
The study of the Uyghur Forced Labor Prevention Act (UFLPA) and its broad impacts on imports of clothing into the United States is interesting. The study clearly shows how the law’s implementation has changed sourcing practices, impacting trade relations with Vietnam, Bangladesh, and CAFTA-DR nations in as well as lowering imports from China. It is especially interesting to note the finding that U.S. cotton exports have become more integrated into these supply chains since the U.F.L.P.A., which points to a strategic shift among exporters to reduce compliance risks. But there is little proof to support the growth of near shoring in the Western Hemisphere, which raises the issue of how well regional trade policies respond to these disruptions. The competition between cotton and MMF clothing, which represents larger changes in material preferences and trade strategies, further grows the conversation. This study highlights the intricate relationship between supply chain dynamics, market forces, and trade policy, offering insightful information to both industry stakeholders and policymakers.
This study does an excellent job of highlighting just how impactful UFLPA truly is. The consequences of this act are not just shown in China, but also throughout the entire global textile supply chain. US imports fell 350 million SME and other countries also decreased their imports from the region as well. This is because this specific region in China is responsible for almost 90% of cotton production. Additionally, data suggests that the alliance between the US and other affected countries has strengthened due to the increase in raw cotton exports from the US to said countries. While it was predicted that this act would increase near shoring for the cotton apparel industry, there has been no evidence shown that agrees with this prediction. This study highlights how nuanced and inter-connected the global supply chain is with even non Chinese countries feeling the effects of this act. I found it particularly interesting that the UFLPA did not increase nearshoring but instead pushed countreis like Bangladesh, Vietnam, and CAFTA-DR countries to source from the US instead. It is always so interesting to see how the smallest change in the supply chain can send ripples felt around the world. Either way, this act being passed was definatley a step in the right direction, specifically getting away from forced labor.