Trade has become the centrepiece of US measures aimed at blocking imports from China potentially linked to forced labour. Aluminium – a key ingredient in many modern goods – is finding itself in the crosshairs of Washington’s enforcement regime. As Jacob Atkins reports, importers of the metal will now face the daunting task of proving their supply chains are free of coerced workers from China’s Turkic minorities.

 

Aluminium is looming as a new front in the stand-off between the US and China over forced labour practices.

In recent years, the US has ramped up its enforcement of measures designed to keep imports made with forced labour from entering the country. It has homed in on goods made in the vast northwestern Chinese province of Xinjiang, and goods which may have been made by workers forcibly relocated from the mainly Muslim region.

US Customs and Border Protection (CBP), the main agency enforcing the efforts at ground level, has broad authority to detain goods it suspects may contain even a small element tainted with forced labour. To release their shipments, importers have to hand over voluminous and detailed records of their supply chains to validate their compliance.

Following attention from human rights groups and the growing importance of aluminium to electric vehicle supply chains, the US appears to be close to adding the metal to a small group of goods that are subject to closer scrutiny. The attention will apply not just to imports of aluminium, but also any goods that contain even a small amount of the metal, which is widely used in both consumer and industrial applications.

The focus on aluminium poses a challenge for carmakers that have deep supply chains in China and sell internationally – particularly those that export to the US.

The US government, human rights groups and others have linked aluminium production and processing in China to forced labour in the country’s Uyghur population, who mainly live in Xinjiang.

The Chinese government has clamped down on religious and cultural self-expression among the mainly Muslim Uyghurs and other Turkic minorities in northwestern China, such as ethnically Kazakh and Kyrgyz people.

The UN has estimated that more than a million people have been incarcerated in a network of camps across the region, which China describes as “political education” facilities designed to instil national, as opposed to ethnic, values. Some detainees are transferred within Xinjiang or elsewhere in the country to work in factories and other workplaces.

A February report from Human Rights Watch urged the US government to add aluminium as a “high priority” sector under the 2021 Uyghur Forced Labour Prevention Act (UFLPA), alongside products such as cotton, textiles and tomatoes, which have long been closely linked to forced labour risk.

Almost 9% of global aluminium supply comes from Xinjiang, the report noted, and carmakers are especially exposed as the metal is widely used in vehicles, including in the chassis, batteries and wheels. Aluminium’s importance to the automotive industry is growing, driven by its lightweight properties that are especially favoured for electric vehicles.

Several key aluminium processors in China participate in forced labour transfer programmes, according to Human Rights Watch and previous research by other rights groups and academics. Some companies that supply coal to aluminium smelters in China have also been implicated in the use of forced labour from Xinjiang.

“Consumers should as a result have little confidence that they are purchasing and driving vehicles free from links to abuses in Xinjiang,” the report says.

In addition to its use in cars made in China by local or foreign car manufacturers and exported overseas, aluminium with origins in Xinjiang also makes its way onto the international market through sales to global commodity traders, Human Rights Watch says.

 

Enforcement signals

Every 12 months, the Forced Labor Enforcement Task Force, a group of representatives from US government departments and agencies, is required to report on the US’ strategy to prevent imports of goods made with forced labour in China. Its most recent report, from July 2023, identified “aluminium and downstream products’” among the handful of goods which are “potential risk areas”.

CBP, the agency that oversees importers’ compliance with the UFLPA, has also signalled it intends to take a closer look at aluminium product imports. Beginning late last year, the agency added notes relating to aluminium to a document it sends companies when their imports are detained under the UFLPA.

The document, provided to importers as an addendum to detention notices, is intended to provide companies with guidance on how to satisfy CBP that the goods being imported are outside the scope of the UFLPA.

For trade lawyer Amanda Levitt, the inclusion of aluminium in the document suggests the product “is considered a high-risk commodity by US customs at this time”.

“We do believe that aluminium is the forthcoming high-priority target for detentions,” Levitt, a member with Sandler, Travis & Rosenberg, tells GTR.

The CBP addendum provides guidance to importers on how to submit a successful application to release a detained consignment. For aluminium products, that includes a flowchart of all manufacturing steps and entities, certificates of origin or manufacturers’ affidavits, raw materials invoices (supported by payment slips and production records) and details on where the aluminium was processed into ingots and billets and then further manufactured into other products.

In addition to aluminium, the addendum lists batteries, cotton, polysilicon, PVC, steel and tomatoes – all goods which have already been flagged as products where supply chains are most at risk of entanglement with forced labour in China.

“If customs has a reasonable suspicion that there is even one drop of Xinjiang material in the products or if the goods were made by one worker under forced labour transfer, then those goods are going to be detained under a detention notice with the authority of the UFLPA,” Levitt explains. “That is what makes UFLPA unprecedented because it is so broad, especially in the authority for enforcement.”

 

Bipartisan support

The US has traditionally maintained the most stringent system for detecting imports possibly linked to forced labour. Its regime of withhold and release orders (WROs), under which CBP detains imports and only releases them when satisfied they were not produced with forced labour, has been in place since the early 1990s. But the dominant focus on China over the last half a decade is also enmeshed in the two countries’ volatile political ties.

The two superpowers argue frequently over issues such as the independence of Taiwan, spying, theft of technology, the war in Ukraine and even the social media app TikTok. But trade tensions have remained the primary source of contention. Concern about cheap imports from China and the loss of US jobs spans the political divide in the US. Both Joe Biden and Donald Trump are expected to campaign heavily on the issue in this year’s presidential election.

Whatever the election outcome, pressure on importers over their Chinese supply chains is unlikely to ease.

“There’s currently a bipartisan effort to properly enforce UFLPA,” says Levitt. “So I do think this type of enforcement will continue, regardless of what happens at election time.”

While the Biden administration introduced the UFLPA, the initial acceleration in customs enforcement came during the Trump presidency. 2020, Trump’s final year in office, saw the highest number of WROs issued since the early 1990s, with the bulk relating to imports from China.

For European firms with little US presence, the regulatory pressure on forced labour has been milder. But a deal struck in March on a new EU law to ban imports made with forced labour looks set to change that.

The draft law agreed between the European Parliament and EU member states would prohibit the import and export of any product made with forced labour. Similarly to the US WROs, shipments will be detained until the importer provides sufficient evidence that the supply chain has not been tainted with forced labour.

“The EU law isn’t perfect, but it’s strong and hopefully creates those incentives, provided that it is ultimately passed,” says Jim Wormington, a senior researcher at Human Rights Watch and the author of the report on carmakers. There are differences with the UFLPA, he says, “but in essence, it does the job of deterring forced labour inputs”.

Earlier this year, Canada’s Forced and Child Labour in Supply Chains Act came into force. Unlike the US regime, it only requires companies over a certain revenue threshold to file reports on how they are mitigating forced labour threats, rather than a system of import detentions.

Modern slavery legislation in other countries, such as the UK and Australia, is currently much softer, but debate is continuing about introducing tougher laws targeting trade.

 

On notice

Receiving a detention notice from CBP can be the start of a complex process for importers. Probes by the agency extend much further beyond just looking at whether goods, or parts thereof, originated in Xinjiang.

A detention notice the agency issued to retail chain Uniqlo in 2021, which was briefly published online and seen by GTR, showed officials’ concerns over a shipment of shirts manufactured in China were not allayed even when Uniqlo demonstrated that the cotton was sourced in Australia and Brazil. The CBP said that even cotton imported to China could then be processed in companies that use Uyghur forced labour.

In addition to the concerns about aluminium and goods typically associated with Xinjiang, such as cotton, suspicion has also been cast on industries not previously linked to the province. While Xinjiang is thousands of kilometres from the nearest ocean, a recent report by investigative organisation the Outlaw Ocean Project revealed that large Chinese seafood suppliers had used more than 1,000 Uyghur workers linked to forced labour programmes to produce seafood that was exported to the US.

The revelations prompted a US congressional committee on China to urge the Department of Homeland Security to “aggressively step up enforcement” of the UFLPA. The committee wants the US government to undertake more prosecutions, conduct more certificate of origin verification investigations and enhance collaboration between government departments.

In addition to the seafood sector, the committee’s letter – sent in January – also highlighted forced labour risks in critical minerals and gold mining industries. It also pointed to tactics by Chinese exporters or US importers to avoid CBP scrutiny by routing shipments through third countries.

CBP data shows that in most cases, goods detained under the UFLPA weren’t even shipped, at least directly, from China. Instead, since the implementation of the Act, goods from Malaysia (US$1.29bn) and Vietnam (US$650mn) topped the list of countries from where detained imports originated, notably ahead of imports from China itself at US$320mn. Almost the same value of imports from Thailand were detained on suspicion of containing at least parts of goods made with Uyghur forced labour.

The UFLPA does not explicitly require importers to have a comprehensive system of supply chain tracing in place. But the detail and volume of records needed to lift any detention of goods effectively pushes companies to adopt that approach.

Like many other sectors, tracing aluminium supply chains in China can be tricky.

“From talking to people who use it in the car industry and in government, the limitation of those [traceability] products is the available data,” says Wormington at Human Rights Watch. “There isn’t very much available data at all on the flow of aluminium from Xinjiang to the end user in China.”

Wormington says the only way to establish traceability is for car companies, for example, “to go back to their own suppliers and say, ‘where did you get this aluminium sheet from?’ And then the aluminium sheet producer to go back and say, ‘where did you get this alloy from?’ and the alloy producer to say, ‘where did you get this aluminium from?’ There’s no magic bullet of joining the dots through technology… You basically need to trace your own supply chain using your own relations with your suppliers.”

While an industry standard for sustainable aluminium sourcing exists, its application in China has pitfalls.

Some carmakers use the leading ESG standards and certification body, the Aluminium Stewardship Initiative (ASI), to procure supplies that have been mined and processed sustainably, including without forced labour risks.

The ASI has not certified any production companies within Xinjiang, and says it is unlikely to do so in the future because of their reliance on coal. But Human Rights Watch criticised ASI as “flawed”, partly because it still certified two Chinese companies that the rights group identified as being linked to forced labour in the past. The body disputes the characterisation.

In any case, only around 20% of aluminium supply is fully ASI-certified, according to the initiative, meaning it is difficult for large companies to only use products that have passed the standards and chain of custody tests.

The complex nature of modern supply chains is not only a problem for companies trying to unravel their own, but will also present a challenge for customs enforcement officials seeking to apply the UFLPA to aluminium, Wormington says.

“The reality is the way that the supply chains are structured right now, they’re so opaque. There’s so much intermixing of good and bad product, that it’s very difficult for them to have a smoking gun of a Xinjiang connection.”