Vietnam Garment Makers Linked to Esquel Keep U.S. Sales

Three Vietnam-based garment manufacturers with documented historical and commercial links to Chinese textile giant Esquel Group have continued exporting cotton apparel to the United States, despite Esquel being placed under U.S. sanctions over alleged links to forced labor in China’s Xinjiang region. Reuters found that the three manufacturers have exported at least $5 million worth of cotton goods to the United States since Esquel was sanctioned in November 2024.

Vietnam Garment Makers Maintain Links to Esquel

The three companies identified in the investigation are An Loi Apparel, Tessellation Binh Duong and Tessellation Hoa Binh. Their relationship with Esquel goes beyond the fact that they have sourced cotton from the Chinese textile group.

Corporate records reviewed by Reuters show that all three companies previously operated under names incorporating variations of Esquel Garment Manufacturing Vietnam. They were rebranded in October 2022, around the same period that Esquel reorganized parts of its business.

Former Esquel chief executive Edgar Tung was also listed in corporate filings as an owner’s representative at the three Vietnamese manufacturers. The companies were controlled by the same three offshore firms before and after their names changed.

The corporate links are significant because the United States has tightened scrutiny of supply chains connected to Xinjiang and companies accused of benefiting from forced labor.

At Least $5 Million in U.S. Exports

Reuters identified at least $5 million in cotton goods exported to the United States by the three Vietnamese manufacturers since Esquel was sanctioned.

The shipments included clothing made for international brands. Japanese retailer Muji and New Zealand menswear company Rodd & Gunn confirmed that they sourced products from the Vietnamese manufacturers.

Shipment records show that Muji USA sourced apparel from at least one of the companies while it was still operating under the Esquel Garment Manufacturing name.

Muji told Reuters that it was not aware of links between its suppliers and Esquel Group. The company said it planned to audit one of the plants during 2026 and noted that its suppliers had signed commitments not to use forced labor.

Rodd & Gunn confirmed that it sourced products from two of the manufacturers. The company also said it was not aware of their connection to Esquel and said it requires partners to source cotton from the United States, Brazil and Australia while collecting documentation intended to verify the Supply Chain.

Does the Clothing Contain Xinjiang Cotton?

One of the most important limitations in the investigation is that Reuters could not establish whether the products shipped to the United States contained cotton produced by Esquel Group or cotton originating in Xinjiang.

The Vietnamese manufacturers source cotton from multiple suppliers. Esquel was historically a major supplier, but the companies also obtained cotton from other entities.

Supply-chain experts and U.S. trade lawyers told Reuters that blending cotton from different sources is common within the textile industry. That can make it difficult to determine the origin of the raw cotton used in a finished garment unless companies maintain detailed chain-of-custody records.

As a result, the corporate and commercial connections documented by Reuters do not by themselves establish that the U.S.-bound garments contained Xinjiang cotton or cotton produced through forced labor.

Why Esquel Was Targeted by U.S. Authorities

Esquel Group is a major textile company whose operations have historically extended across cotton production, textile processing and apparel manufacturing. The company has operated in Xinjiang, a major cotton-producing region of China.

U.S. authorities have accused companies operating in Xinjiang of links to forced-labor programs involving Uyghurs and other predominantly Muslim ethnic minorities. The Chinese government has rejected allegations of systematic forced labor and persecution as baseless.

In 2020, U.S. authorities blacklisted one of Esquel’s Xinjiang mills over alleged forced-labor concerns. Esquel disputed the allegations and challenged the designation in U.S. court.

A federal court in Washington rejected Esquel’s request for emergency relief, and an appellate court upheld that decision in July 2022.

Esquel’s Corporate Restructuring

Esquel subsequently underwent a significant corporate restructuring. The company spun off its consumer brands and technology operations into an entity known as Tessellation Group.

Several senior executives became associated with the new organization, including Dee Poon, the daughter of Esquel chairperson Marjorie Yang.

At roughly the same time, the three Vietnamese garment manufacturers dropped their Esquel branding. Two adopted Tessellation-related names, while one later became known as An Loi Apparel.

Reuters could not determine whether Tessellation Group ultimately owns the three Vietnamese garment companies. Tessellation Group did not respond to questions about the relationship.

However, the commercial relationship with Esquel Group continued after the rebranding.

Esquel Supplied Most of the Cotton Sent to the Three Makers

Customs data reviewed by Reuters show that Esquel remained a major supplier to the three Vietnamese manufacturers after the U.S. sanctions.

Between November 2024 and June 2026, Esquel exported approximately 70% of its $34 million in China-origin cotton exports to the three Vietnamese manufacturers.

The data indicate that the Vietnamese companies remained commercially connected to Esquel even after their corporate identities changed and Esquel itself became subject to U.S. restrictions.

When Reuters visited the Tessellation Hoa Binh facility, workers who said they had been employed there before the rebranding told reporters that management and working practices had not changed.

U.S. Law Places Xinjiang Supply Chains Under Heavy Scrutiny

The United States significantly strengthened its restrictions on products connected to Xinjiang through the Uyghur Forced Labor Prevention Act, which was signed into law in 2021.

The law establishes a presumption that goods linked to Xinjiang are produced using forced labor unless importers can demonstrate otherwise. This places substantial responsibility on companies to document their supply chains and demonstrate that imported products do not violate U.S. forced-labor restrictions.

Esquel Group was added to the U.S. government’s list of entities covered by the law in November 2024.

For American retailers and apparel companies, the designation creates significant supply-chain compliance challenges. Companies sourcing garments from Vietnam may need to examine not only their immediate Vietnamese supplier but also the origin of cotton, yarn, fabric and other materials used in production.

Enforcement Does Not Cover Every Shipment

U.S. Customs and Border Protection is responsible for enforcing restrictions on goods suspected of involving forced labor. However, CBP does not physically inspect every shipment entering the country.

Reuters found that between November 2024 and June 2026, CBP detained approximately $2.6 million worth of apparel from Vietnam for inspection under the U.S. forced-labor law.

That compares with roughly $28 billion in apparel shipped from Vietnam to the United States during the same period.

More than half of the detained merchandise, measured by value, was subsequently released.

The figures highlight the scale of the challenge facing customs officials. The U.S. imports enormous quantities of apparel from Asian manufacturing hubs, making it difficult to physically inspect every shipment or trace every component back through multiple layers of suppliers.

Why Supply-Chain Traceability Matters

The case demonstrates why supply-chain transparency has become increasingly important for clothing companies operating in the U.S. market.

A garment may be manufactured in Vietnam but use cotton originating elsewhere. That cotton may be processed into yarn and fabric before being incorporated into a finished product. Multiple suppliers and intermediaries can therefore exist between the original cotton producer and the retailer selling the final garment.

This creates a distinction between where a garment is manufactured and where its raw materials originated.

For brands, maintaining documentation at each stage can be critical when regulators investigate the origin of imported products.

Muji and Rodd & Gunn Respond to the Findings

Muji confirmed its relationship with the Vietnamese manufacturers but said it was unaware of their links to Esquel Group.

The Japanese retailer said its suppliers had pledged not to use forced labor and that it planned to conduct an audit of one of the plants. The company did not state whether it would take additional action based on the Reuters findings.

Rodd & Gunn also confirmed that it had sourced products from two of the Vietnamese manufacturers. The company said its sourcing requirements include cotton from the United States, Brazil and Australia and that it collects documentation designed to establish the chain of custody.

Neither company indicated that it knew about the historical Esquel connections before Reuters raised the issue.

Pressure on U.S. Customs Enforcement

The enforcement figures have also attracted scrutiny from U.S. lawmakers. In December 2025, Democratic lawmakers wrote to CBP leaders questioning a decline in inspections under the Uyghur forced-labor law.

The lawmakers argued that inspection levels had fallen even though there was no evidence that shipments potentially prohibited by the law had declined.

CBP has said it continues to prioritize enforcement of forced-labor laws alongside its responsibility for collecting tariffs.

The agency has faced additional workload pressures as the United States expanded tariffs on imports from numerous countries. Trade lawyers specializing in the Uyghur forced-labor law have said the combination of tariff enforcement and forced-labor enforcement creates significant operational demands for customs authorities.

What the Case Means for Apparel Companies

The Esquel-linked manufacturers highlight a broader issue affecting global apparel supply chains: corporate restructuring does not necessarily eliminate commercial relationships.

A company can change its name, reorganize ownership structures or move parts of its operations while continuing to source materials from previous business partners. For importers, identifying these connections can require examination of corporate records, shipping data, supplier declarations and historical business relationships.

The case also shows why supplier audits alone may not always provide a complete picture. A retailer may have a direct relationship with a Vietnamese manufacturer without having direct visibility into every upstream supplier that provides cotton or other materials.

As U.S. restrictions on forced-labor-linked imports remain significant, companies selling clothing to American consumers face increasing pressure to demonstrate that their supply chains can withstand regulatory scrutiny.

The Broader U.S.-Vietnam Apparel Trade

Vietnam has become one of the world’s major apparel manufacturing centers and a major supplier to the U.S. market. The country’s large garment industry serves global brands across clothing categories ranging from casual wear to premium menswear.

That scale makes Vietnam an important focus for U.S. supply-chain enforcement. Even a small percentage of questionable shipments can represent substantial dollar values when measured against billions of dollars in annual apparel trade.

For manufacturers, the challenge is to maintain traceability from finished products back to the materials used in production. For retailers, the challenge is ensuring that supplier certifications are supported by reliable evidence.

What Happens Next?

The Reuters findings do not establish that the garments exported by the three Vietnamese companies contained Xinjiang cotton or cotton produced using forced labor. They do, however, document continuing corporate and commercial connections between the manufacturers and Esquel Group.

The issue could therefore place additional attention on how U.S. importers evaluate indirect supplier relationships.

For brands, future compliance efforts are likely to focus increasingly on detailed supplier mapping, raw-material documentation and independent audits. For customs authorities, the case illustrates the difficulty of enforcing restrictions across complex international supply chains.

The central question is not simply where a shirt was sewn. Increasingly, regulators and consumers want to know where the cotton came from, who processed it, which companies handled it and whether each stage can be independently verified.

FAQs

1. Which Vietnamese garment companies are linked to Esquel?

The three manufacturers identified by Reuters are An Loi Apparel, Tessellation Binh Duong and Tessellation Hoa Binh. All previously operated under variations of the Esquel Garment Manufacturing Vietnam name.

2. How much clothing did the companies export to the United States?

Reuters identified at least $5 million worth of cotton goods exported to the United States by the three manufacturers since Esquel was sanctioned in November 2024.

3. Did Reuters establish that the U.S.-bound clothing contained Xinjiang cotton?

No. Reuters said it could not establish whether the products contained cotton produced by Esquel Group or cotton originating in Xinjiang.

4. Why was Esquel sanctioned by the United States?

Esquel was placed under U.S. restrictions over allegations concerning links to forced-labor programs in Xinjiang. Esquel has denied the allegations.

5. What is the Uyghur Forced Labor Prevention Act?

The U.S. law, enacted in 2021, establishes a presumption that goods linked to Xinjiang are produced using forced labor unless importers can demonstrate otherwise.

6. Which international brands sourced products from the Vietnamese manufacturers?

Reuters reported that Japanese retailer Muji and New Zealand menswear company Rodd & Gunn confirmed sourcing apparel from the manufacturers.

7. What did Muji and Rodd & Gunn say about the Esquel connection?

Both companies said they were not aware of the manufacturers’ links to Esquel Group. Muji said it planned to audit one facility, while Rodd & Gunn described its requirements for documenting cotton sourcing and chain of custody.

8. Why is the case important for U.S. apparel imports?

The investigation highlights the difficulty of tracing raw materials through complex global supply chains. A garment manufactured in Vietnam can involve cotton and other materials sourced through multiple countries and companies, making detailed supply-chain documentation increasingly important.