China adds PVH Corp and Illumina to “unreliable entity list” amidst escalating trade tensions

In a move that further intensifies trade tensions between China and the United States, China’s Ministry of Commerce announced on Tuesday that it has added PVH Corp and Illumina to its “unreliable entity list.” This designation signals a significant escalation in the ongoing trade dispute and raises concerns about the future of business relations between the two economic giants.   

PVH Corp, the parent company of renowned fashion brands such as Calvin Klein and Tommy Hilfiger, and Illumina, a leading U.S. biotechnology firm specializing in gene sequencing technology, now join a growing list of foreign companies that have fallen out of favor with Beijing. The Ministry of Commerce stated that these companies have “violated normal market transaction principles” and engaged in “discriminatory measures” against Chinese enterprises, thereby “harming” the legitimate rights and interests of Chinese companies.   

This decision comes as trade tensions between the U.S. and China continue to escalate, with both countries imposing tariffs and restrictions on each other’s goods.

 The “unreliable entity list,” introduced by China in 2019, is seen as a retaliatory measure aimed at foreign companies that are deemed to be acting against China’s interests.   

The specific actions that led to PVH Corp and Illumina being added to the list have not been fully disclosed. However, PVH Corp had previously faced scrutiny from Chinese regulators over allegations of “improper” conduct related to the Xinjiang region, where concerns have been raised about human rights abuses. Illumina, on the other hand, may have been targeted due to its dominance in the gene sequencing market, which is considered a strategically important sector by China.   

The consequences of being placed on the “unreliable entity list” can be severe. Companies on the list may face a range of restrictions, including limitations on trade, investment, and operations in China. They may also be subject to fines and other penalties. The move against PVH Corp and Illumina sends a clear signal that China is willing to take strong action against foreign companies that it perceives to be acting against its interests.   

This decision is likely to further strain relations between China and the U.S., which have been fraught with tension in recent years. The two countries have been locked in a trade war for several years, and despite some attempts at de-escalation, significant differences remain. The addition of PVH Corp and Illumina to the “unreliable entity list” suggests that China is taking a more assertive stance in its trade relations with the U.S.   

The timing of this announcement is also noteworthy, as it comes shortly after the U.S. imposed additional tariffs on Chinese goods. This move by China can be seen as a direct response to the U.S. tariffs and a signal that it will not back down in the face of pressure.

The implications of this decision are far-reaching, not only for PVH Corp and Illumina but also for other foreign companies operating in China. It underscores the risks of doing business in China and the need for companies to carefully navigate the complex political and regulatory landscape. As trade tensions between the U.S. and China show no signs of abating, foreign companies must be prepared for further actions and potential disruptions to their operations.