Owner Calvin Klein PVH on a black list in China

China is on the black list of owner Calvin Klein and Tommy Hilfiger, which could force the company to extinguish trade and production in early consequences President Donald Trump’s trade war.

China added PVH Corp. On the list of “unreliable entities” on Tuesday, which allows the Chinese government to plan the seller, forbids imported and export activities, recalls of work permits and deny employees the possibility of entering the country, among other things, intentionally vague forces.

While the Chinese Ministry of Trade started exploring PVH in September for the alleged rejection of cotton sources from the Xinjiang region, which became infamous for its detention camps Uyghur, Beijing officially put the company on its black list on Tuesday. The announcement followed only a few days after Trump overthrew 10% of tariffs on imports from China and came along with a series Other retaliation Against the US, including new duties on energy imports and agricultural equipment.

“This trade war takes place there [China] He wants to show the United States that he will take measures to harm or large US companies or companies with significant interests in the United States, “said Michael Kaye, a Squire Patton Boggs partner, who practices international trade law for over 30 years.” . … I guess it is, [China] They wanted to choose someone and they wanted it to be someone who is high visibility. “

Now that the PVH is on the list of unreliable entities, China could force the company to extinguish the dozens of stores operating in the region and ban it to sell goods to Chinese consumers online, Kaye said. His staff – including those who built lives in China – could be effectively deported and sent home, Kaye added.

It is unclear whether China will try to conduct actions against PVH in the Hong Kong’s autonomous region, where the Asian-Pacific company is the company’s headquarters. In 2020, China passed a law that gave him more power to implement national laws in Hong Kong, which is “especially the case with laws applied to national security”, which could include an unreliable list of subjects, Kaye said.

From Thursday morning at eastern time, the company seemed to operate as usual in China.

China could even ban PVH in production in the region, which could make it move production to other countries and struggle to fulfill the customer warrants.

It is unclear which steps will be done exactly by China or Trump’s administration will try to convince China not to punish the company.

In a statement, PVH said that “it was surprised and deeply disappointed to find out a decision from the Chinese Ministry of Trade.”

“In our 20 years of business in China, we are proud to serve our consumers, as a question of politics, the PVH maintains strict respect for all relevant laws and regulations and operates in accordance with established industrial standards and practice. We will continue engagement with relevant authorities and rejoice in positive resolution.” , the company said.

China represented 6% of the sale of PVH -Ai 16% earnings before interest and tax 2023, but relies more on the Earth for production, which is a higher risk of its business. The PVH has more factories and suppliers in China than in any other region, which represents about 18% of production, according to the publication published in December.

“It can be very, very devastating to the PVH,” said Globaldata CEO and retail analyst Neil Saunders. “They should surely try to find a new capacity. They could, of course, over time, but two things are that are, because there are a lot of supply chains on time, they would probably discover that they were stocked while they were made a transition.

The PVH has been active in China for over 20 years, and while working with suppliers and factories in more than 30 other countries, a higher -class goods that makes it difficult to produce elsewhere because of the necessary level of skill, Saunders said.

“Although you can easily transfer the production capacity, it is not so easy to guarantee quality, guarantee production processes. These things need time for Upskall,” Saunders said. “China has this capacity and has these skills, because PVH has been operating there for years. The second country, another production drive, may not have those skills immediately.”

In addition, PVH has viewed China as a growth market and will now have to look for new strategies to increase sales and profitability because demand falls for its top dresses, intimate clothing and sweaters.

The Chinese unreliable list of entities is a relatively new law in the country, and experts say it is intentionally opaque. The government has a wide width to take measures against PVH, but it remains unclear what exactly will do. Usually, the guidelines come within a few days from the accommodation of the company on the black list, Kaye said.

China could add PVH to the list and do nothing to do, but Kaye said that the chances were “very lean” because the government would want to avoid perception to give up. China is more likely to use PVH as a negotiating chip at a negotiating table with Trump and use it as an example to show the power that has to inflict pain Other US companies with the main operations and bases of customers in China, like Nike,, Apple,, General Motors,, Starbucks and others.

“There is some kind of sword of Damocles [PVH’s] The head, and that is exactly this, because it is not really about PVH at all. This is a PVH that is caught in a shower between China and the US, “Saunders said.” China uses PVH as an example to say, see, if the tariff teaching, if other limitations are established in cinema, can make life difficult for US companies in the country. This is really about it. “