US Customs and Border Protection (CPB) on Sept. 24 issued a Withhold and Release Order under Section 307 of the Smoot-Hawley Tariff Act of 1930 — which prohibits imports of goods made with forced labor — targeting bicycles, bicycle parts and accessories manufactured by Giant, a Taiwanese bicycle brand. The measure applies only to the US market and does not affect exports to other regions.
However, it marks the first time that a Taiwanese manufacturer has faced sanctions due to concerns over forced labor — a warning for export competitiveness and institutional resilience.
The CPB has the authority to detain, exclude or seize goods at the border as long as it has reasonable suspicion that they involve forced labor. If a company wishes to regain market access, it has three months to provide “clear and convincing” evidence that its production processes are free of forced labor.
Observing international trends, the US typically adopts a “detain first, investigate later” enforcement model, whereas European countries emphasize prevention. Germany in 2023 implemented its Supply Chain Act, which requires large companies to establish oversight mechanisms. The EU has passed the Forced Labour Regulation and the Corporate Sustainability Due Diligence Directive, elevating human rights risk management to a shared obligation.
Japan in 2022 issued its Guidelines on Respecting Human Rights in Responsible Supply Chains, guiding companies to independently implement due diligence. These illustrate that the international market is moving toward robust governance, with human rights due diligence becoming a consensus.
Taiwan’s regulatory framework falls behind. Most companies only disclose information based on environmental, social and governance standards, placing a heavy focus on the environmental aspect while lacking comprehensive mechanisms for human rights and labor governance — a gap that poses risks for exports. The International Labour Organization (ILO) has outlined 11 indicators that can be used to identify forced labor. If regulators adopted and applied the indicators, Taiwanese products could face restrictions due to suspected forced labor.
Taiwan’s long-standing issues — high brokerage fees, overcrowded dormitories and excessive working hours — align with multiple ILO indicators, which only further amplifies the risk.
It is clear that neglecting labor governance can not only create human rights abuses, but also trade barriers, legal risks and market uncertainty. As the US attempts to reshore manufacturing, it is also employing legal tools to bolster human rights oversight.
Meanwhile, Europe is institutionalizing human rights governance through legislation. The developments indicate that the international community has upgraded labor standards to a prerequisite to market access. If Taiwan continues to delay reforms, the sanctions might not be limited to bicycles — other export industries could soon become the targets for scrutiny.
The Giant incident revealed that a sound framework for labor and supply chain governance is not just a matter of corporate responsibility, but a critical part of national strategy. As human rights protections evolve from ethical expectations to legal obligations and trade challenges, Taiwan can no longer afford to passively patch the holes — it must build robust defenses.
Only by accelerating the implementation of human rights due diligence systems and helping businesses pre-emptively identify and address risks can Taiwan improve its international reputation and lay a stable foundation for its industries.
Harper Chen is a youth adviser at the Executive Yuan and a licensed attorney in New York and Washington.
Translated by Kyra Gustavsen
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