Updated March 21: Chinese sneaker maker Li-Ning Sporting Goods has responded to the announcement that U.S. Customs and Border Protection (CBP) will seize products at U.S. ports of entry produced or manufactured by the company.
The sanctions, instated March 14, represent an enforcement action against the company after an investigation found that Li-Ning uses North Korean labor for production. Via the Countering America’s Adversaries Through Sanctions Act (CAATSA), U.S. law prohibits North Korean goods to enter the country without proof that forced labor was not involved in production.
“CAATSA is yet another tool in CBP’s trade enforcement arsenal that allows us to uphold the fundamental value of human dignity and to ensure the goods that enter the United States are free from forced labor,” said AnnMarie Highsmith, CBP Office of Trade executive assistant commissioner in a statement.
In a filing to the Hong Kong Stock Exchange on Wednesday, Li-Ning said that it had “not discovered any cases of forced labour in the supplier management system.” The company described the “speculations” about its labor as “incorrect and misleading.”
Li-Ning added that it “strictly prohibits and opposes any form of forced labour employed by its suppliers, and always upholds human rights and legal rights of labour.”
While based in Beijing, Li-Ning has made strides to break into the American market in the last decade.
The company opened its first American showroom and retail store in 2010. In 2012, the Chinese athletic brand signed an eight-year $10 million contract with NBA star Dwayne Wade and subsequently inked a lifetime contract with the athlete in 2020. Li-Ning also signed a deal with NBA star Jimmy Butler in 2020, and in 2021, the brand announced a partnership with famed skater Erik Ellington, resulting in its first-ever skateboarding line with shoes and apparel.
Li-Ning has also seen success in China, threatening the growth of international sportswear players in the region. According to a December report from The NPD Group, which analyzed the Chinese footwear market in Q3 of 2021, consumers in China increasingly prefer their own homegrown brands such as Anta Sports and Li-Ning as opposed to international brands like Nike and Adidas.
Additionally, consumers in China have participated in boycotts against Adidas, Nike and other Western brands that have refused to source cotton from China’s Xinjiang region, due to allegations of forced labor among the Uyghur population in that area.