When U.S. Customs issued a "withhold release order," Taiwan-based bicycle giant Giant likely felt more than just the potential 4% revenue loss—it experienced the chilling effect of tightening human rights compliance in global cross-border trade.
On September 25, U.S. importers received urgent notifications from Customs: all Giant complete bicycles, components, and accessories labeled as made in "Taiwan" were placed under a Withhold Release Order (WRO), effectively barred from entering the U.S. market. This sudden prohibition stems from a September 24 action by U.S. Customs and Border Protection (CBP) against Giant's manufacturer, Giant Manufacturing. The agency cited evidence suggesting forced labor practices, including exploitation of vulnerable workers, substandard living conditions, debt bondage, wage withholding, and mandatory overtime.
Giant promptly issued an emergency statement vowing to appeal and seek revocation of the order. The company estimates the measure will impact 4% to 5% of consolidated revenue. While emphasizing that the WRO only affects Taiwan-manufactured products destined for the U.S., Giant acknowledged inevitable short-term disruptions including shipment delays, inspections, and potential returns. The company stated it activated contingency protocols and is coordinating closely with CBP and partners to mitigate consequences.
Giant's Compliance Efforts
Responding to the allegations, Giant asserted it began reforming its migrant worker policies last year, including assuming recruitment fees and improving dormitory conditions. The company further committed to implementing a zero-recruitment-fee policy starting January 2025, covering all new foreign hires' placement costs. Additional measures include internal monitoring systems, third-party audits, and ongoing due diligence to align with international labor and human rights standards.
Whether these efforts will satisfy CBP remains uncertain. The case reflects intensifying global scrutiny of supply chain human rights issues. Notably, on December 13, 2024, the European Union enacted Regulation (EU) 2024/3015 prohibiting market placement of forced labor products. Effective December 14, 2027, this legislation will ban the sale, distribution, or export from the EU of any goods produced with forced labor—signaling unprecedented compliance pressures on global supply chains.
Human Rights Compliance: The New Trade Imperative
The Giant incident exemplifies broader regulatory trends in international commerce. As consumer awareness about product origins grows and governments prioritize human rights, supply chain transparency and labor protections have become prerequisites for global trade participation. Companies must now ensure their operations avoid forced labor, child labor, and other human rights violations with equal vigilance as they maintain product quality and pricing.
The EU's forced labor regulation epitomizes this shift, granting the European Commission extensive investigative authority over suspect enterprises and market exclusion powers. This mandates rigorous supply chain due diligence at every production stage.
Navigating the Compliance Landscape
To meet escalating human rights requirements, multinational corporations should consider these strategic approaches:
Comprehensive Supply Chain Management: Implement systems for supplier risk assessment and vetting, examining labor policies, working conditions, and compensation structures through regular audits.
Supplier Collaboration: Foster long-term partnerships with open communication about operational practices while providing compliance training and technical support.
Third-Party Verification: Engage independent certifiers to evaluate supply chains, enhancing transparency and demonstrating human rights commitments to stakeholders.
Internal Oversight: Establish monitoring protocols and whistleblower mechanisms to promptly identify and rectify violations.
Industry Engagement: Participate in collective initiatives to stay abreast of evolving standards and share compliance best practices.
Regulatory Responsibilities
Beyond corporate action, government agencies must strengthen oversight of multinational enterprises by:
Enhanced Supply Chain Scrutiny: Prioritizing investigations into forced labor and child labor violations with appropriate penalties for non-compliance.
Robust Reporting Systems: Creating protected channels for human rights violation disclosures with incentives for verified reports.
International Cooperation: Coordinating cross-border enforcement against labor abuses in global supply networks.
The Giant case serves as a stark reminder that in an era of heightened human rights accountability, proactive supply chain governance is no longer optional—it's fundamental to sustainable global commerce.