China threatens sanctions on Calvin Klein owner over Xinjiang cotton boycott

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Beijing says it’s investigating fashion retailer PVH Corp, the owner of Calvin Klein and Tommy Hilfiger, for refusing to source cotton from the Xinjiang region, in a move that could lead to sanctions on an American company with major business interests in China.

Tuesday’s announcement from the Commerce Ministry came a day after the Biden administration proposed a possible ban on the sale or import of smart vehicles in the United States that use specific Chinese or Russian technology because of national security concerns.

The ministry said in a statement that New York-based PVH (PVH) is suspected of “violating normal market transaction principles” by boycotting cotton sourced from China’s far western region of Xinjiang. It could be sanctioned by being placed on the country’s so-called “unreliable entities list,” which would bar the firm from doing business in China.

There are currently five American companies on the list, first announced in 2019, none of which do much business in China because they are largely defense manufacturers. Their presence on the list means they’re banned from importing, exporting and investing in China.

In a statement sent to CNN on Wednesday, PVH said it “maintains strict compliance with all relevant laws and regulations in all countries and regions in which we operate. We are in communication with the Chinese Ministry of Commerce and will respond in accordance with the relevant regulations.”

According to the retailer’s supply chain guidelines, it prohibits direct or indirect sourcing from Xinjiang. The US began banning