Every company in the marketplace loves to reduce its costs and maintain high margins to make profits. There generally is a balance and a generally accepted method in the management of the supply chain. In some industries, it is easier to see conflicting values.

In an article by Keith Bradsher of the New York Times News Service, PVH Corp is a fashion retailer that owns the Calvin Klein and Tommy Hilfiger brands. Not surprisingly in the fashion industry, much of the clothing is made in Southeast Asia with a base in China.

China is a large country and in the west are Muslims which the Chinese would like to replace with non Muslims. The Chinese have done many things in the western part of the country, which consumers in the developed countries would prefer not to be done. One method to raise awareness of the actions is through economic means or boycott items made in western China. However, in China and elsewhere the supply chains often gravitate in some areas to the lowest cost and event though the garment maybe made in eastern China, the cotton production comes from eastern China. 90% of the cotton grown in China comes from Xinjiang Province.

The country of China similar to many countries around the world would prefer that others take care of their backyards first. One of the things that China is doing is taken discriminatory measures against companies that focus on the consumer rather than the producer.

PVH, which is based in New York, called its public relations firms and release a statement saying that it was in communication with Chinese officials in the China Ministry of Commerce. PVH maintains strict compliance with all relevant laws and regulations in all countries it operates in,

China is not only a large consumer market but also the world’s largest manufacturer. Many companies depend on factories in China and could be vulnerable if Bejing decided to impose sanctions on their subsidiaries or suppliers.

The US the Ughur Forced labor Prevention Act bans the import of any goods from Xinjaing unless the importer can prove to US customs officials that the products were made without forced labor. The law took affect in 2022.

China has passed its own laws that ban laws, sanctions or boycotts in other countries. The Ministry of Commerce has authority to deem commercial decisions as a threat to China’s national security.

Linking to dividend paying stocks, in many decisions there are more than one competing interests and senior management makes the decisions they make. There are always competing interests and companies have to weigh what is more important, because some group will not be happy with the outcome. The company has to weigh does it have other supply chain options or it can begin to work on a diversified supply chain? There is never a perfect answer because of the pressures to keep costs low, margins high and profits to pay dividends keep coming in.

There are more questions than answers, till the next time – to raising questions.