(Bloomberg) -- The Biden administration’s narrowly focused ban on Chinese-made solar products is designed to confront alleged human rights abuses in the Xinjiang region without stifling the fast-growing use of renewable energy in the U.S.

The order imposed Thursday, which affects the import of silica-based products made by Hoshine Silicon Industry Co., Ltd., represents one of President Joe Biden’s biggest steps yet to counter alleged mistreatment of China’s ethnic Uyghur Muslim minority.

Yet it falls short of a broad regional ban some activists had urged on solar imports from Xinjiang, a manufacturing hub where advocacy groups and a panel of United Nations experts say Uyghurs and other minorities have been forced to work against their will. China has denied the allegations, saying they’re an attempt to undermine successful businesses.

Homeland Security Secretary Alejandro Mayorkas called the actions “part of our continued commitment to protect human rights and international labor standards.”

“The United States will not tolerate modern-day slavery in our supply chain,” Mayorkas said in a briefing Thursday.

Hoshine has a wide reach as the dominant supplier of metallurgical silicon used to make polysilicon, a chief ingredient in solar panels and semiconductors worldwide. Its customers include Daqo New Energy Corp., Wacker Chemie AG and a unit of GCL-Poly Energy Holdings Ltd., according to a Sheffield Hallam University analysis.

Still, U.S. solar companies, which rely heavily on imported photovoltaic panels, had already begun shuffling supply chains in anticipation of the action, and the industry’s leading trade group praised the move.

Biden has prioritized the fight against climate change and is seeking to dramatically boost the U.S. use of renewable power. But the intersection of the solar supply chain with alleged human rights abuses creates a conflict between the president’s environmental and human rights agendas.

“Our environmental goals will not be achieved on the backs of human beings in a forced-labor environment,” Mayorkas said. “We’re going to root out forced labor wherever it exists.”

The order should “not impact the majority of imports,” Height Capital Markets analyst Benjamin Salisbury said in a note to clients Thursday.

Instead, the targeted approach represents a “substantive but measured first shot across the bow by the Biden administration, which needs solar industry support to reform human rights practices as it attempts to balance a conflicting U.S. labor and environmental agenda,” Salisbury said.

Mayorkas said the U.S. is aggressively investigating “the use of forced labor in silicon supply chains and a broad range of other industries.”

“Producers and U.S. importers alike should understand that there will be consequences for entities that attempt to exploit forced labor to sell goods in the United States,” Mayorkas said.

Pressed on the lack of a regional ban, Mayorkas said the administration’s move was calibrated to conduct, not geography.

Hoshine’s shares fell 7.2% in Shanghai trading Thursday, while U.S. manufacturer First Solar Inc. was up 7.1% to $85.90 at 10:06 a.m. in New York on Thursday, after rising as much as 9.3%, the most intraday since January.

“We see the news as a positive for First Solar given they do not use polysilicon,” Jeff Osborne, an analyst at Cowen & Co., said in a research note. “The development is likely to lead to accelerating orders from utility-scale developers to avoid traceability issues in the future and also believe the market development supports First Solar’s new factory in Ohio, announced earlier this month and slated to open in ‘23.”

Chinese Foreign Ministry Spokesman Zhao Lijian said the U.S. was trying to cripple the industrial development of Xinjiang and seeks to force poverty and unemployment on the region.

“China strongly condemns the sanctions that the U.S. imposes on Chinese companies based on lies and disinformation,” he said at a regular press briefing in Beijing. “China will take all necessary measures to resolutely safeguard the legitimate rights and interests of Chinese companies.”

Under the “withhold release order” issued Thursday, “personnel at all U.S. ports of entry have been instructed to immediately begin detaining shipments that contain silica-based products made by Hoshine,” the White House said in a statement. “The United States will not tolerate forced labor in our supply chains.”

Over the last two and a half years the U.S. has imported about $6 million in direct imports from Hoshine and about $150 million of imports of downstream products, according to U.S. Customs and Border Protection. The order would include any products built in whole or part with silica-based products made by Hoshine and its subsidiaries.

The U.S. Department of Labor also updated its “List of Goods Produced by Child Labor or Forced Labor” to include polysilicon made with forced labor in China.

Separately, the Commerce Department added five Chinese entities to its export blacklist, a move that bars American companies from selling to those companies without U.S. government approval. They are Hoshine; Xinjiang Daqo New Energy Co. Ltd.; Xinjiang East Hope Nonferrous Metals Co. Ltd.; Xinjiang GCL New Energy Material Technology, Co. Ltd.; and Xinjiang Production and Construction Corps., which has previously been sanctioned.

Hoshine, East Hope and GCL-Poly didn’t reply to emailed requests for comment. Daqo could not comment on the issue, head of investor relations Kevin He said in a text message.

“We welcome today’s announcement and see it as a very important first step to ending forced labor in global clean energy supply chains,” Cathy Feingold, AFL-CIO International Director, said in an email. “We believe that an important next step is to release a regional withhold release order which would ensure that no corporations can benefit from egregious worker rights violations in the production of solar products.”

Senator Marco Rubio, a Republican from Florida, called the move a “step in the right direction,” but said it was “not enough.”

Rubio said the administration should support legislation he is pushing that would go further by barring goods and products made with forced labor in Xinjiang from entering the U.S. market.

The Solar Energy Industries Association, a Washington-based trade group, which recently unveiled a traceability tool aimed at helping solar importers and manufacturers track the supply of materials, said it supported the action.

“The fact is, we do not have transparency into supply chains in the Xinjiang region, and there is too much risk in operating there,” the association’s general counsel, John Smirnow, said in an emailed statement.

Even so, the import ban could negatively impact the entire U.S. solar industry since Hoshine produces about 800,000 metric tons of metallurgical silicon annually, Roth Capital Partners LLC said in a research note for clients. “If implemented, module imports would need to prove that there is no content from Hoshine in order to enter the U.S.”

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