HANOI: Three garment manufacturers in Vietnam have continued exporting cotton products to the United States despite maintaining business links with Chinese textile group Esquel, which was placed on a U.S. sanctions list over allegations related to forced labor in China’s Xinjiang region.

The three Vietnamese manufacturers have collectively shipped at least $5 million worth of cotton goods to the United States since Esquel was sanctioned, according to shipment information examined in a new investigation.

The companies involved are An Loi Apparel, Tessellation Binh Duong and Tessellation Hoa Binh. Their corporate history shows connections with Esquel that go beyond simply purchasing cotton.

All three companies previously operated under names containing Esquel Garment Manufacturing Vietnam before being rebranded in 2022. Corporate records also show links involving ownership structures and individuals associated with Esquel.

Esquel was designated by U.S. authorities in 2024 amid allegations concerning forced-labor programmes in Xinjiang. The company has denied those allegations.

The Vietnamese manufacturers continue to source cotton from multiple suppliers. However, trade data indicates that Esquel remained a major supplier to the three businesses after the U.S. sanctions were imposed.

Between November 2024 and June 2026, Esquel reportedly supplied around 70% of the cotton it exported from China to the three Vietnamese manufacturers. The total value of those exports was approximately $34 million.

The available trade records do not establish whether the cotton used in products shipped to the United States originated specifically from Xinjiang or from Esquel’s own production facilities. The Vietnamese manufacturers also source materials from other suppliers, making the precise origin of individual shipments difficult to determine.

This distinction is particularly important because cotton supply chains can involve multiple stages and materials from different sources may be combined during manufacturing.

The issue has attracted attention because the United States has imposed strict restrictions on products connected to forced labor in Xinjiang. U.S. customs authorities can presume that goods covered by the relevant legislation were produced using forced labor unless importers provide sufficient evidence to overcome that presumption.

Some products manufactured by the Vietnamese companies have been supplied to major international brands.

Japanese retailer Muji confirmed that it sourced clothing from at least one of the manufacturers. The company said it was unaware of the links between the Vietnamese supplier and Esquel and indicated that it planned to audit one of the facilities.

New Zealand-based clothing company Rodd & Gunn also confirmed sourcing products from two of the manufacturers. It said it was not aware of their connection with Esquel and described its procedures for documenting the origin of materials.

The companies did not indicate whether they would change their sourcing arrangements following the newly reported connections.

The situation highlights the difficulties multinational companies face when tracing raw materials through complex international supply chains. A product may be manufactured in one country while its raw materials originate elsewhere, creating challenges for businesses attempting to verify the complete chain of custody.

The developments could also increase scrutiny of Vietnam’s growing apparel-export industry. Vietnam is a major supplier of clothing to the U.S. market, making compliance with American import regulations particularly important for manufacturers and international brands.

U.S. Customs and Border Protection has encouraged companies to remove suppliers involved in forced labor or require changes to business practices. The agency did not specifically comment on the individual findings concerning the three Vietnamese manufacturers.

The case illustrates how international trade restrictions can become difficult to enforce when companies restructure, change names or operate through multiple jurisdictions.

For apparel brands, the issue reinforces the importance of detailed supplier verification and traceability. For manufacturers, maintaining access to major markets increasingly depends not only on production capacity and pricing but also on demonstrating compliance with increasingly strict supply-chain requirements.

The latest developments could lead to closer scrutiny of cotton shipments from Vietnam and other manufacturing hubs supplying the U.S. market.