How firms linked to sanctioned Chinese cotton giant sell clothes to US

In July, a tonne of cotton shirts was unloaded at the port of Los Angeles after a trip from southern Vietnam.

The apparel had come from a garment manufacturer closely related to Chinese textile giant Esquel Group, shipment records show. Esquel has effectively been banned from selling to US customers since November 2024, when Washington sanctioned the company over alleged links with forced labour programmes in China's Xinjiang region. Hong Kong-based Esquel denies the allegations.

Since Esquel's blacklisting, three garment makers in Vietnam have continued to source much of its cotton while also selling products to the US, the records show.

The three manufacturers all had ties with Esquel that ran beyond a shared supply chain: All three used geographical variations on the name 'Esquel Garment Manufacturing Vietnam' until they were rebranded in October 2022.

Edgar Tung, who served as Esquel's chief executive between 2021 and 2022, was also listed in corporate filings as an owner's representative at the three makers. The records show that the garment makers were owned by the same three offshore firms before and after they were renamed.

The connections detailed by Reuters are "likely sufficient" for customs authorities to conclude that the manufacturers operate within Esquel's ecosystem, said former Assistant US Trade Representative Joshua Kagan, now an attorney with Washington firm Kelley Drye & Warren, who reviewed the news agency's findings.

Reuters could not establish whether the products sent by the Vietnamese makers to the US contained cotton that was produced by Esquel Group or in Xinjiang, the far western region of China that is home to some 20% of global cotton production. The three manufacturers also source from entities other than Esquel, whose shipment data show was for years their biggest supplier. It is, however, industry practice to blend cotton from different sources together, two supply chain experts and two US trade lawyers told Reuters.

Esquel Group and a representative for the Vietnamese makers, An Loi Apparel, Tessellation Binh Duong and Tessellation Hoa Binh did not respond to requests for comment about their relationship and exports to the US.

Tung also did not respond to questions.

The three garment makers together have exported at least $5 million in cotton goods to the US since Esquel was sanctioned. Details of the firms' US sales haven't been previously reported.

A spokesperson for US Customs and Border Protection, which is responsible for enforcing the forced labour sanctions, did not comment on Reuters findings but said that the agency encourages companies to either remove suppliers that use forced labour or require them to change their practices.

The clothing that the Vietnamese manufacturers shipped to the US was made for brands including Japanese retail giant Muji and New Zealand menswear label Rodd & Gunn. The companies confirmed they sourced from those makers. Shipment data show that Muji USA has sourced apparel from at least one of the garment makers since it was known as Esquel Garment Manufacturing. The company, however, told Reuters it was not aware of any links between the makers and Esquel Group. It said that it plans to conduct an audit of one of the plants this year and that its suppliers have signed a pledge not to use forced labour. Muji did not say if it planned to take further action based on Reuters findings.

Rodd & Gunn confirmed that it sourced from two of the garment makers. The label also said it was not aware of any connection between its suppliers and Esquel, and shipment data show it was not a customer of the garment makers before they were rebranded. Rodd & Gunn said it required its partners to source exclusively from the US, Brazil and Australia and that it collects documentation to verify the chain of custody. It also did not say if it planned to take any further action.

Esquel to Tessellation

Esquel Group describes itself as a "seed to shirt" enterprise. Its operations in recent years have spanned agriculture research labs, cotton mills and apparel factories.

The company has a long history of operating in Xinjiang, where cotton has been grown for hundreds of years. The region is also home to millions of Uyghurs, a mostly Muslim ethnic minority that UN experts and the US say have been persecuted by China's Han-Chinese-dominated government.

The alleged abuses include the detention of Uyghurs in internment camps where the US government says they are forced to produce textiles for minimal pay. China says the allegations are baseless.

Textiles from the region flowed freely to the West until around 2020, when US regulators sanctioned one of Esquel's Xinjiang mills over its alleged use of Uyghur forced labour. Esquel said that major customers, including Tommy Hilfiger owner PVH, subsequently moved to pause or cancel orders.

PVH did not respond to a request for comment.

Esquel challenged the blacklisting, but a federal court in Washington quashed its application for emergency relief. An appellate court upheld that ruling in July 2022.

Esquel Group a few months later spun off its consumer brands and tech operations into an entity known as Tessellation Group. Senior executives at the spinoff include Dee Poon, the Harvard-educated daughter of Esquel chairperson Marjorie Yang. Neither responded to requests for comment.

At around the same time, the Vietnamese garment manufacturers ditched their Esquel branding and were renamed Tessellation. One of the makers later changed its name again to An Loi Apparel.

Reuters could not determine if Tessellation Group was the ultimate owner of the three garment makers that were also named Tessellation. Tessellation Group did not respond to questions about its relationship with Esquel and the garment makers.

When Reuters visited Tessellation Hoa Binh's plant, six workers who said they had been employed there before the garment maker was rebranded told reporters there had been no change in their management or working practices.

The three garment makers continued to maintain close commercial ties with Esquel Group. Esquel sent about 70% of the $34 million in cotton it exported from China between November 2024 and June 2026 to the three garment makers, customs data show.

Tung, the former Esquel chief, became Tessellation Group's CEO in January 2023.

Enforcement gaps

Washington's crackdown on textile imports from Xinjiang intensified after the 2020 blacklisting of Esquel's mill.

The Uyghur Forced Labour Prevention Act, which bars virtually all imports linked to Xinjiang, was signed into law in 2021. Esquel Group was named a listed entity under the law in November 2024, a designation which authorises customs officers to presume its goods are produced by forced labour unless proven otherwise.

CBP, however, does not inspect all goods entering the country. Between November 2024 and June 2026, it detained for inspection under the Uyghur forced labour law roughly $2.6 million of the $28 billion in apparel shipped from Vietnam to the United States. More than half of the detained goods, in terms of value, were subsequently released.

That level of enforcement has drawn scrutiny from Democratic lawmakers. In a letter to CBP leaders in December 2025, the US lawmakers said that inspections have "dropped drastically in recent months despite no evidence that shipments of goods prohibited by the law have slowed."

CBP, which is also responsible for collecting tariff duties, has been under immense pressure from the unprecedented tariffs imposed by the Trump administration since 2025, said Jessica Rivkin, a Washington-based attorney at law firm OFW and a specialist in the Uyghur forced labour law.

These include the tariffs imposed by President Donald Trump in July on goods from dozens of countries, which Washington said had adopted lax safeguards against forced labour.

A CBP spokesperson said it prioritises both enforcement of forced labour laws and the implementation of tariffs. The Trump administration continues to make efforts to keep forced labour goods out of US supply chains, the spokesperson said, including this year's designation of 43 companies under the Uyghur forced labour law.