China excludes Calvin Klein and Tommy Hilfiger after Trump's tariffs

China excludes Calvin Klein and Tommy Hilfiger after Trump's tariffs

Calvin Klein and Tommy Hilfiger are at the center of a burgeoning trade conflict between the USA and China. The Chinese Ministry of Finance, the parent company of the two American clothing stamps, has put a kind of black list of companies on the list of "unreliable companies". This was done in the context of a comprehensive package of measures that the Chinese government decided in response to the introduction of 10 % tariffs to all Chinese imports by President Donald Trump.

The allegations against PVH

A spokesman for the Chinese Ministry of Commerce said on Tuesday that PVH had discriminated against Chinese companies and affected their business activities, but without naming specific details. China also added the US biotechnology company Illumina to the black list.

consequences of the classification as a "unreliable company"

The inclusion on the list of "unreliable companies" could prevent PVH from doing business in China, or led to fines and other sanctions, according to experts. "It is remarkable that PVH is targeted because it is the first time that a consumer brand is documented with the name 'unreliable company'," said Sam Ide, Vice President of the Asia Group, a management consultancy that specializes in China. Previously, the Chinese government had only put US defense companies on the list.

reaction of PVH

pvh criticized the decision and explained that they wanted to work with the Chinese authorities to clarify the situation. Like all US retailers, PVH also prohibits the direct or indirect procurement of products from Xinjiang province in China. Under the presidency of Joe Biden, the United States has banned all goods that were manufactured in this region for forced labor. Human rights groups report that Uiguren and other mainly Muslim minorities in the region are faced with a variety of human rights violations, including detention in mass camps.

China's possible retaliation measures

The Chinese government could take revenge for the refusal of PVH, cotton from Xinjiang, which is associated with forced labor by Uighuries. In September, Beijing explained that PVH was examined for "violation of normal market transaction principles" because the company had carried out a boycott against cotton from Xinjiang.

China's perspective

china referred to the facilities in Xinjiang as "vocational training centers" and in 2019 claimed that such centers were closed. Official bodies have consistently rejected all allegations of human rights violations in Xinjiang.

meaning of China for PVH

pvh has a "sufficiently significant presence in China", but it will not have great economic consequences, says Ide. It is unclear why the Chinese government has targeted PVH in particular, but IDE noticed that PVH "fulfills some criteria" and the company is not as large as Nike or other popular US brands in China. Therefore, fewer jobs would be affected when PVH was closed in China and the economic consequences would be less.

economic effects on PVH

A restriction of PVH's business in China would be a bitter setback for the company. In 2023, China contributed 6 % to PVHS sales and 16 % to win. Calvin Klein has a physical presence in almost every Chinese province. "China is an important engine for our growth," said PVH CEO, Stefan Larsson, in a conference call in April. "We continue to focus on increasing general brand awareness, especially in China, where both Calvin and Tommy are underrepresented."

The CNN reporters Juliana Liu and Simone McCarthy contributed to this article.