The forced labour filling our closets: U.S. is coming after it in an unprecedented wayA new U.S. law takes effect this month targeting items made with forced labour, notably in China's Xinjiang region. Critics of the measure warn it will cause economic chaos. And possibly test our consumption habits.

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Penalties against goods made with forced labour take effect June 21. Businesses warn it will cause chaos

Alexander Panetta · CBC News(Leah Millis/Reuters)

Companies say there's no clarity about how this will work; warn it could raise costs and worsen inflation; and say it's mind-bogglingly complex to weed out every forbidden fibre from fabrics that get sold, and re-sold, across several countries before becoming a final product.

One firm that tracks these illicit goods says its artificial intelligence software counts millions of buyer-seller relationships around the world involving entities linked to forced labour in Xinjiang.

• Leaked photos of Uyghurs interned at Xinjiang detention centres 'devastating,' says activist

The firm's co-founder says his software sees nearly one million direct business-to-business connections with forced labour, and seven million second-hand connections.

"It's in everything," said Evan Smith, whose company, Altana, works with government agencies and companies to map those networks. "Your razor blades, your T-shirts, your antibiotics, your spice rack, your diapers. This stuff is really touching so much of the everyday economy." 

WATCH | Marketplacejournalists question companies over forced labour:

Chinese tomato companies questioned by undercover CBC journalists over forced Uyghur labour

7 months agoDuration 2:47CBC Marketplace's Asha Tomlinson and Eric Szeto posed as tomato brokers to get access to Chinese tomato companies and asked them questions about the use of Uyghur labour in their workforce. In Xinjiang, a remote area of western China, Uyghurs are subjected to mass detention, surveillance and torture by the Chinese government.

Spillover effect on Canada

Make no mistake: this change will have a spillover effect in Canada. Partly because we operate in a trade area with so many cross-border businesses.

This country also has legal obligations under the new North American trade deal: it's committed to stopping forced-labour imports, and the deal also created a forced-labour task forceto monitor the issue in the U.S.

Canada enters this era lagging behind; it has not prevented a single shipment since the new North American trade pact took effect, according to a reportin The Globe and Mail.

Canada is now looking to tighten its rules with a billthat's nearly passedthrough Parliament that would force companies to produce annual reportson their supply chains.

"It really upsets me, to be honest. … The difficulty of doing due diligence is nothing compared to the human suffering taking place in the Uyghur region."

Asat said international companies have been on notice for years that the Uyghur region is awash in forced labour, and they could have acted sooner if they cared.

WATCH | Report highlights alleged abuses in Xinjiang:

U.K. must act on China's treatment of Uyghurs, report says

11 months agoDuration 3:38A new report suggests that the U.K. needs to pressure China to end its human rights abuses of the Uyghur Muslim minority. The report calls for a boycott on certain goods and a ban on some international sporting events.

New law could create a new industry

New technologies could be part of the solution.

Oritain, for example, does DNA analysis. Altana, which maps out supply chain relationships and warns clients if they're working with a firm linked to forced labour, was co-founded by Alan Bersin, a former U.S. customs commissioner under Barack Obama, with the specific goal of cracking down on forced labour.