Exclusive-How firms linked to sanctioned Chinese cotton giant sell clothes to U.S

In July, a shipment of cotton shirts from a Vietnamese garment manufacturer made its way to the port of Los Angeles. The manufacturer is linked to Chinese cotton giant Esquel Group, which was sanctioned by the U.S. in November 2024 due to alleged ties with forced labor programs in China's Xinjiang region. Despite Esquel's blacklisting, three garment makers in Vietnam have continued to source cotton from the company and sell products to the U.S. These makers, An Loi Apparel, Tessellation Binh Duong, and Tessellation Hoa Binh, all had ties to Esquel beyond a shared supply chain.

Edgar Tung, who served as Esquel's CEO between 2021 and 2022, was also listed as an owner's representative at the three makers. The connections between the makers and Esquel are "likely sufficient" for customs authorities to conclude that they operate within Esquel's ecosystem, according to a former Assistant U.S. Trade Representative.

While Reuters could not determine if the products shipped to the U.S. contained cotton produced by Esquel Group or in Xinjiang, industry practice dictates that garment makers often blend cotton from various sources. The three garment makers have collectively exported at least $5 million in cotton goods to the U.S. since the company's sanction.

They have supplied brands such as Muji and Rodd & Gunn. Muji USA and Rodd & Gunn, the latter of which confirmed sourcing from two of the garment makers, did not express awareness of any connection between the makers and Esquel Group. Esquel Group operates in Xinjiang, where forced labor allegations have been made against Uyghur Muslim ethnic minority.

China denies these allegations. Esquel Group, following the U.S. sanctions, spun off its consumer brands and tech operations into Tessellation Group, with several senior executives from Esquel now involved.