The American group PVH, owner of Tommy Hilfiger and Calvin Klein, commented on Wednesday “deeply disappointed” about China’s decision to put the company on the country’s sanction list. How this step will affect the business in China is still unclear.
Beijing added the fashion group to its list of “unreliable companies” on Tuesday-part of a number of measures against US companies in China in the escalating trade dispute between the two business powers.
In response to this, the AFP news agency based in New York announced that it was “surprised and deeply disappointed with the decision of the Chinese Ministry of Commerce”.
“PVH strictly adheres to all relevant laws and regulations and acts in accordance with established industry standards and practices,” it said. “We will continue our dialogue with the responsible authorities and look forward to a positive solution,” added the company.
PVH on sanction list – what’s next?
PVH generated 6 percent of its sales and 16 percent of his profit before interest and taxes (EBIT) in 2023 in China, as the fashion group reported in its quarterly report in September. There, the fashion group also called possible consequences of a sanction by the Chinese Ministry of Commerce for companies that were classified as “unreliable”.
These range from possible fines to restrictions or forbidden from imports and exports and to China. In the worst case, this means that PVH may have to set its procurement from China or its retail and wholesal science there.
At the moment it is not yet known what consequences it has that PVH is now on the sanction list. The stock of the fashion group has only slightly weakened at $ 82.01 (78.74 euros) on Tuesday since the announcement from China.
Fashion groups between the fronts
After reports of various organizations, such as the United Nations, found serious human rights violations in the Chinese province of Xinjiang, many fashion companies took their distance from procurement in the region after public pressure or dropped their delivery relationships. The procedure in turn led to criticism in China, as in the case of H&M. This is how fashion companies come between the fronts.
Supervisory authorities of western countries such as Canada, for example, determined against local offshoots of globally active corporations such as Hugo Boss or Ralph Lauren for suspicion of forced labor from Uigures in the supply chain. The United States blocked the import of cotton and textiles from Xinjiang and put Chinese companies on sanction lists. On the other hand, the corporations risk attracting the Chinese government’s anger.
PVH in the sights of Beijings
Chinese officials said in September that they would investigate PVH against PVH because of the “unreasonable” boycott of cotton from the Xinjiang region. The Chinese side does not see any factual reasons for the boycott and accuses PVH of discriminatory measures, as the Reuters news agency reported in September.
The results of a preliminary investigation by the Chinese Ministry of Commerce in January already indicated that PVH could be included in the list of “unreliable companies”.
Tense relationship
The tone between China and the USA has become sharper in recent years. US President Trump led tariffs of 10 percent to all goods from China this week. In return, China reacted to coal, liquefied natural gas, oil and agricultural machines with additional tariffs.
While the United States sanctioned Chinese companies such as Huawei or recently wanted to ban Tiktok, China reacts with retaliation against US corporations. The latest example is the sanctions against PVH and Illumina.
On Tuesday, the Chinese Ministry of Commerce accused the US company to violate “normal market transaction principles” and to take “discriminatory measures against Chinese companies”. The government’s step should “protect national sovereignty, security and development interests”.
Beijing also announced an investigation against the US technology giants on Tuesday for violations of its antimonopolitan laws. The authorities did not provide any further information about the allegations. Contacted by AFP, a Google spokesman rejected a statement. (AFP/Fashionunited)
This post was created with the help of Weixin Zha and was updated at 11:23 a.m. on February 5, 2025.