People shop for clothes at the Calvin Klein store at a commercial center in Beijing on February 5, 2025.
Adik Perry AFP | Gety pictures
China has included the black owner of Calvin Klein and Tommy Hilfiger, which may force the company to stop stores and manufacture in early repercussions from War Trade to President Donald Trump.
China added PVH Corp. To the list of “unreliable entities” on Tuesday, which allows the Chinese government to express retail stores, prohibits import and export activities, cancels work permits, and depriving employees the ability to enter the country, among other mysterious forces.
While the Chinese Ministry of Commerce The investigation started PVH in September because of his cotton source from the Xinjiang area, which became notorious to Ouigor detention camps, Beijing officially put the company in its black list on Tuesday. This announcement came a few days after Trump's 10 % tariffs on imports from China, and it came with a large number of Other retaliatory measures Against the United States, including new duties on energy imports and farm equipment.
Michael Kai, a partner in Squire Patton Boggs, who practices the International Trade Law for more than 30 years, said. “An example was presented … … (China) wanted to choose someone and wanted to be a big person.”
Now that PVH has become the list of unreliable entities, China can force the company to close dozens of stores operating in the region and prevent them from selling its goods to Chinese consumers via the Internet, Kai said. Kai added that its employees – including those who built life in China – can be deported and sent to the home.
It is not clear whether China will try to impose action against PVH in the independent area of Hong Kong, where the company is located in the Asia Pacific region. In 2020, China approved a law granting it more power to impose national laws in Hong Kong, and this is “in particular the case with logical laws on national security”, which could include the list of unreliable entities.
As of Thursday morning, Easter, the company seemed to run its business as usual in China.
China can completely prevent PVH from manufacturing in the region, which may force it to transfer production to other countries and struggle to meet customer orders.
It is not clear the steps that China will take exactly, or if the Trump administration will try to persuade China not to punish the company.
In a statement, PVH said he was “surprised and deeply disappointed to know the decision of the Chinese Ministry of Commerce.”
“During 20 years of work in China and proudly serving our consumers, as a policy issue, PVH maintains a strict compliance with all relevant laws and regulations and works in line with the standards and practices of the applicable industry. We will continue our participation with the relevant authorities and look forward to a positive solution.”
China represented 6 % of PVH sales and 16 % of its profits before interest and taxes in 2023, but it relies heavily on the country for manufacturing, which is the biggest risk of its business. PVH has more factories and suppliers in China more than any other region, representing about 18 % of production, according to the detection it issued in December.
“This is the ability to be very turbulent for PVH,” said Nile Sunders, the retail managing director. “They will definitely have to stood to find a new ability. They will be able to do this in time, of course, but the two things that are used are that, because many supply chains are in time, they will happen may find that they were brief in the stock during the transition.
Sonders said PVH is working in China for more than 20 years, and while working with suppliers and factories in more than 30 other countries, high -end goods that make it difficult to manufacture elsewhere because of the required skill level.
“Although you can change the manufacturing capacity easily, it is not easy to guarantee quality, and to ensure production operations. These things take time to decline,” Sundars said. “China has this ability and has these skills, because PVH operates there throughout the ages. Another country, another manufacturing facility, may not have these skills immediately.”
In addition, PVH viewed that China is a growth market and will now have to search for new strategies to increase sales and profitability with a decrease in demand for its high -end dresses, intimate clothes and woolen jackets.
The list of unreliable entities in China is a relatively new law in the country, and experts say it is deliberately transparent. The government has a wide latitude to take action against PVH, but it is still not clear what exactly it will do. Kai said that the instructions usually come within a few days of placing the company on the blacklist.
China PVH can add to the list and do nothing for the company, but Kay said that the chances of this are “very small” because the government will want to avoid imaging that it is retreating. China is likely to use PVH as a bargaining anti -negotiating table with Trump, and uses it as an example to show the strength that provokes the pain in it Other American business With the main processes and bases of customers in China, such as Nikeand appleand General Motorsand Starbucks And others.
“There is a type of DAMOCLES sword hanging on top (PVH), and that's exactly what this is, because this is not really a PVH at all. This is about PVH that is arrested in a way between China and the United States,” Sunders said. “China uses PVH as an example of saying, see, if it is presented, if other restrictions are placed in China, we can make life difficult for American companies in the country. This is what this is going on.”
