Capstone Visual: Plenty of Downside for Investors from a Trade Tool Trump Hasn’t Used (Yet)

Capstone Visual: Plenty of Downside for Investors from a Trade Tool Trump Hasn’t Used (Yet)

Capstone Visuals — UFLPA Enforcement
Client Portal Capstone Visuals
Trade
Andrew LaScaleia
Andrew LaScaleia
Vice President
The Bottom Line:

The Trump administration has neglected a key tool to restrict trade with China — enforcement of the Uyghur Forced Labor Prevention Act (UFLPA). Enacted with bipartisan support in 2021, it presumes that all goods made in the Xinjiang Uyghur Autonomous Region (XUAR) use forced labor and cannot enter the US. Customs and Border Protection (CBP) enforcement has declined significantly since the Biden administration, and investors face limited upside and meaningful downside risk from this posture.

Plenty of Downside for Investors from a Trade Tool Trump Hasn’t Used (Yet)
Shipments Detained Under UFLPA by CBP
Value vs. number of shipments detained · Enforcement value peaked in FY24 and has sharply declined; shipment counts remain elevated
FY22: $471M, 2,335 shipments. FY23: $1,420M, 10,855 shipments. FY24: $1,762M, 11,307 shipments. FY25: $167M, 11,382 shipments. FY26 (so far): $112M, 5,650 shipments.
Value detained — left axis
Shipments detained — right axis

Source: CBP, Capstone analysis  ·  FY = Oct–Sep  ·  FY26 reflects partial year data through early 2026.

Key Stat: The Trump administration has changed how it records certain UFLPA enforcement data. During the Biden administration, a single container holding a shirt, a solar panel, and a toy would be considered a single shipment. Under the new method, each item is counted individually, so the shirt, solar panel, and toy count as three items. A January 2026 CBP notice said the “modification has resulted in a significant change in the number of UFLPA enforcement actions.”

Why This Is Happening: We believe UFLPA enforcement has waned because President Trump is prioritizing stable trade relations with China. Chinese leaders are sensitive to the UFLPA and will welcome less aggressive enforcement, laying the groundwork for constructive dialogue. For Trump, stability carries fewer risks heading into the midterm elections, helps solidify US agricultural exports, and secures a supply of critical minerals.

What Investors Can Expect: A preservation of the status quo following the Trump-Xi summit may be the most comfortable outcome for investors. The UFLPA has the potential to affect all imports containing any subcomponents of Chinese origin. Strong enforcement by CBP would mean a complete reimagining of supply chains for dozens of industries, whereas weaker enforcement would not create the same urgency. If Democrats win at least one chamber of Congress in the midterms, expect them to ramp up the heat. The UFLPA gives CBP unprecedented latitude to detain shipments and create uncertainty for importers, and it can increase enforcement as quietly as it backed off.

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