Thu, 06 Feb 2025

Thu, 06 Feb 2025 How Calvin Klein and Tommy Hilfiger got caught in Trump's trade war with China

The owner of Calvin Klein and Tommy Hilfger has been placed on China's unreliable entities list, which could force it to cease operations in the region.

* China has blacklisted PVH Corp., the owner of Calvin Klein and Tommy Hilfiger, in retaliation for allegedly refusing to source cotton from the Xinjiang region.
* The move gives the Chinese government wide latitude to take action against the company, including fining it, prohibiting import and export activities, revoking work permits, and denying employees entry into China.
* PVH's staff, including those who have built lives in China, could be effectively deported and sent home.
* The blacklist is a relatively new law in China, and experts say it's deliberately opaque, making it unclear what specific actions the government will take against PVH.
* The move is seen as an early repercussion of President Donald Trump's trade war with China, with analysts saying that China is using PVH as an example to show the power it has to inflict pain on other U.S. businesses operating in China.
* China represented 6% of PVH's sales and 16% of its earnings before interest and taxes in 2023, but the company relies more heavily on the country for manufacturing, which could be disrupted by the blacklist.
* Experts say that while it's possible to shift manufacturing capacity easily, guaranteeing quality and production processes takes time, making it difficult for PVH to quickly adjust to a new manufacturing location.
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