WASHINGTON (BRAIN) — Customs and Border Protection on Wednesday said it is detaining bikes, bike parts and accessories made by Giant in Taiwan because of allegations of forced-labor use. The ruling appears to apply to products sold under Giant's brands or produced by Giant in Taiwan for other brands.
CBP said that under a 2011 law it can prohibit goods made with forced labor from entering the U.S. CBP issued a Withhold Release Order for Giant shipments from Taiwan, preventing the inventory from being released into the marketplace. The order doesn't appear to apply to shipments from Giant's factories in China or Vietnam. CBP said it is only the third WRO issued this year; the previous two involved a Chinese fishing company and a South Korean salt farm.
In a press statement shared with BRAIN, Giant said it made changes last year to respond to media reports of worker-rights violations. Specifically, the company now pays recruitment costs for foreign workers and upgraded employee housing. Giant said it will file a petition with CBP to revoke the WRO and "explain that we have already adopted appropriate measures."
Giant said shipments to the U.S. may be delayed or inspected but said it is taking contingency measures and working with its partners to minimize the impact.
"Giant Group remains dedicated to protecting labor rights through concrete actions and ensuring a transparent, fair, and sustainable development. The Group will continually provide timely updates and maintain open communication with global stakeholders to foster a responsible and resilient industry environment," the company said.
In a statement shared with the Taipei stock exchange on Wednesday (Thursday local time), Giant noted that the WRO applies only to products made in Taiwan and exported to the U.S., not other markets. The statement said the full impact of the WRO depends on the outcome of communications with CBP and said the WRO’s estimated impact on Giant’s consolidated revenue ratio is 4-5%. Last year, Giant's sales in the Americas were less than 9% of its total revenue, including sales of products made in Vietnam and China that are not subject to the WRO.
Giant's own brands include Giant, Liv, Momentum, Cadex and Stages. In recent years it has been a major supplier to Trek and Scott, among other brands.
CBP said it identified the following "forced labor indicators during its investigation of Giant:
- abuse of vulnerability,
- abusive working and living conditions,
- debt bondage,
- withholding of wages, and
- excessive overtime."
"Giant profited by imposing such abuse, resulting in goods produced below market value and undercutting American businesses by millions of dollars in unjustly earned profits," the CBP statement read. It said importers of detained shipments may request to destroy or export their shipments, or they may seek to demonstrate that the merchandise is admissible."
If Giant fails to show evidence that the products were not made with forced labor, or if CBP has further evidence of forced labor, CBP can escalate the WRO into a "finding," which would allow CBP to seize and forfeit the goods. Findings are relatively rare: The CBP made just one finding last year, related to imports of metal extrusions from the Dominican Republic.
In February, Le Monde Diplomatique published an investigative report that cited foreign guest workers at Taiwanese bike factories, including Giant, who said they had paid recruiters in their home countries fees of as much as $5,500 to secure work at the factories. Some workers also said that once in Taiwan they had to pay service fees to Taiwanese brokers that amounted to two months’ wages during their three-year contracts. The news source also found similar fees being paid by workers at Merida, Maxxis, Fritz Jou and other Taiwanese factories. It said Giant committed last year to paying the fees on behalf of the foreign workers.
The Business & Human Rights Resource Centre, a nonprofit organization, published a 2024 report that found allegations of worker fees paid by Giant factory workers. The organization said that, when contacted, Giant did not acknowledge any violations but told the organization, "It is understood that some migrant employees pay recruitment fees to home-country recruiters, but our company is not involved in the negotiation and collection of such fees."
According to Giant's 2024 annual report, at the start of this year the company committed to paying migrant workers' travel costs and arrangements including agency fees, regulatory fees, medical examination fees, visa fees, and passport fees. Once the workers are in Taiwan, Giant committed to pay costs including agency service fees, medical examination fees, residence permit fees, and passport fees.
At the Taipei Cycle show in March the Bicycling Alliance for Sustainability, a Taiwan industry group, said its 82 members, including Giant and other major manufacturers, had committed to the organization's Human Rights Rules of Conduct. The commitment includes signing the International Bill of Human Rights.
In 2023, the U.K. news source The Telegraph reported on worker fee violations at a Malaysia factory that is a subcontractor for Shimano's factory in that country. Shimano told BRAIN at the time that it was investigating the report. Le Monde Diplomatique reported in 2024 that foreign workers at the factory had been reimbursed $3,000 each and the workers were "free from bondage risks," apparently due to pressure from Shimano.
