But that order was never announced. Officials from the Agriculture Department, the Treasury Department and the U.S. Trade Representative intervened to raise objections about the measure, saying it could threaten American cotton exports to China, or put the trade deal Mr. Trump signed with China in January at risk, people familiar with the matter said.
In their call on Monday, homeland security officials denied that any intervention prompted the delay, saying the legal review had been “driven by the unique nature” of the policy. “We want to make sure that once we proceed that it will stick,” Mr. Cuccinelli said.
Under a withhold release order, importers are still allowed to bring their products into the United States if they are able to provide proof to customs that the goods were not made with forced labor, for example through an extensive audit of the manufacturing facilities, said John Foote, a partner at Baker & McKenzie who specializes in international trade and forced labor issues. If the importer is not able to produce that proof, the product must be sent back, or it is subject to seizure by U.S. customs.
In August, labor and human rights groups including the A.F.L.-C.I.O. and the Uyghur Human Rights Project filed a petition asking Customs and Border Protection to issue a withhold release order on all cotton goods from the Xinjiang region.
“The system of forced labor is so extensive that there is reason to believe that most cotton-based products linked to the Uyghur Region are a product wholly or in part of forced labor,” the petition read.
Customs has issued several withhold release orders in the past against individual companies with ties to Xinjiang, including clothing makers Hetian Taida Apparel Company and Hero Vast Group. Other entities and people in Xinjiang have been subject to sanctions, including the Xinjiang Production and Construction Corps, an economic and paramilitary group that plays an important role in Xinjiang’s development, and Changji Esquel Textile Co. Ltd., whose parent company, Esquel Group, said it has ties to Ralph Lauren, Hugo Boss and Muji. Esquel Group denies that it uses forced labor in its supply chain and says it is appealing the listing.
In July, the Departments of State, Treasury, Commerce and Homeland Security issued an advisory jointly warning American companies to monitor their activities in China, particularly in Xinjiang, saying they could face “reputational, economic and legal risks associated with certain types of involvement with entities that engage in human rights abuses.”