A recent report by the Wall Street Journal has spotlighted labor exploitation in the luxury goods sector, sparking a wave of social media outrage and criticism. The investigation, led by Milan prosecutors, uncovered labor abuses in factories producing high-end products for iconic brands like Dior and Armani. The probe revealed that foreign laborers were exploited in workshops manufacturing handbags and other leather goods. These workshops, all based in Italy, were producing items for Dior at shockingly low costs. According to court documents, Dior paid a supplier just €53 ($57) per handbag, which retailed in stores for €2,600 ($2,780). Bangladesh to seek $7 billion fund from China to boost trade in business summit during PM's visit Armani’s supply chain showed similar disparities. The brand purchased bags from a supplier for €93, which were then resold to Armani for €250, eventually reaching store shelves priced at approximately €1,800. These findings highlight the significant markup on luxury goods, prompting questions about the true cost of production. Fabio Roia, President of Milan’s court system, emphasized the need for brands to scrutinize their production costs. “Why does it cost so little to manufacture the product? The brands need to ask themselves this question,” Roia was quoted as saying. This investigation is part of a decade-long effort by Milan prosecutors to address illegal working conditions across various sectors. Their focus recently shifted to the luxury industry, which produces half of the world’s high-end goods. The court of justice in Milan has proposed nationwide measures for luxury firms to enhance supplier oversight and ensure compliance with labor laws. The revelations have intensified scrutiny on luxury and fast fashion brands, many of which have previously faced allegations of workforce exploitation and child labor in South Asian countries. The exposure has prompted some brands to reevaluate their supply chains to mitigate reputational damage. BGMEA, Chinese business delegation explore collaboration opportunities Dior, owned by luxury conglomerate LVMH, declined to comment on the findings. However, court documents indicate that the brand has submitted a memorandum outlining measures to address supply chain issues. Armani asserted that it has stringent control and prevention measures in place and is cooperating transparently with authorities. The Wall Street Journal’s report has since been amplified on social media, particularly on the platform X (formerly Twitter). Users expressed their disgust and called for boycotts of the implicated brands, further amplifying the pressure on luxury fashion houses to reform their practices.

The Group of Seven’s top financial leaders united Saturday in their support for Ukraine and their determination to enforce sanctions against Russia for its aggression but stopped short of any overt mention of China. The finance ministers and central bank chiefs ended three days of talks in Niigata, Japan, with a joint statement pledging to bring inflation under control, help countries struggling with onerous debts and strengthen financial systems. They also committed to collaborating to build more stable, diversified supply chains for developing clean energy sources and to “enhance economic resilience globally against various shocks.” The statement did not include any specific mention of China or of “economic coercion” in pursuit of political objectives, such as penalizing the companies of countries whose governments take actions that anger another country. Also Read: G-7 talks focus on ways to fortify banks, supply chains as China accuses group of hypocrisy Talk this week of such moves by China had drawn outraged rebukes from Beijing. Officials attending the talks in this port city apparently balked at overtly condemning China, given the huge stake most countries have in good relations with the rising power and No. 2 economy. The finance leaders' talks laid the groundwork for a summit of G-7 leaders in Hiroshima next week that President Joe Biden is expected to attend despite a crisis over the U.S. debt ceiling that could result in a national default if it is not resolved in the coming weeks. Japanese Finance Minister Shunichi Suzuki said that Treasury Secretary Janet Yellen mentioned the issue in a working dinner, but he refrained from saying anything more. While in Niigata, Yellen warned that a failure to raise the debt ceiling to enable the government to continue paying its bills would bring an economic catastrophe, destroying hundreds of thousands of jobs and potentially disrupting global financial systems. No mention of the issue was made in the finance leaders' statement. The G-7's devotion to protecting what it calls a “rules-based international order” got only a passing mention. The leaders pledge to work together both within the G-7 and with other countries to “enhance economic resilience globally against various shocks, stand firm to protect our shared values, and preserve economic efficiency by upholding the free, fair and rules-based multilateral system,” it said. G-7 economies comprise only a tenth of the world’s population but about 30% of economic activity, down from roughly half 40 years ago. Developing economies like China, India and Brazil have made huge gains, raising questions about the G-7's relevance and role in leading a world economy increasingly reliant on growth in less wealthy nations. China had blasted as hypocrisy assertions by the U.S. and other G-7 countries that they are safeguarding a “rules-based international order” against “economic coercion” from Beijing and other threats. China itself is a victim of economic coercion, Chinese Foreign Ministry spokesperson Wang Wenbin said Friday. “If any country should be criticized for economic coercion, it should be the United States. The U.S. has been overstretching the concept of national security, abusing export controls and taking discriminatory and unfair measures against foreign companies,” Wang said in a routine news briefing. China accuses Washington of hindering its rise as an increasingly affluent, modern nation through trade and investment restrictions. Yellen said they are “narrowly targeted” to protect American economic security. Despite recent turmoil in the banking industry, the G-7 statement said the financial system was “resilient” thanks to reforms implemented during the 2008 global financial crisis. “Nevertheless, we need to remain vigilant and stay agile and flexible in our macroeconomic policy amid heightened uncertainty about the global economic outlook,” it said. Meanwhile, inflation remains “elevated" and central banks are determined to bring it under control, it said. Since prices remain “sticky,” some countries may see continued rate hikes, said Kazuo Ueda, Japan’s central bank governor. “The impact of the rate hikes has not been fully realized,” he told reporters. Japan won support for its call for a “partnership” to strengthen supply chains to reduce the risk of disruptions similar to those seen during the pandemic, when supplies of items of all kinds, from medicines to toilet paper to high-tech computer chips, ran short in many countries. Suzuki said details of that plan would be worked out later. “Through the pandemic, we learned that supply chains tended to depend on a limited number of countries or one country,” he said, adding that economic security hinges on helping more countries develop their capacity to supply critical minerals and other products needed as the world switches to carbon-emissions-free energy. Tensions with China, and with Russia over its war on Ukraine, inevitably loomed large during the talks in Japan, the G-7's only Asian member. “We call for an immediate end of Russia’s illegal war against Ukraine, which would clear one of the biggest uncertainties over the global economic outlook,” the joint statement said. The financial leaders took time to listen to ideas on how to focus more on welfare in policymaking, rather than just GDP and other numerical indicators that often drive decisions with profound impacts on people's well being. “These efforts will help preserve confidence in democracy and a market-based economy, which are the core values of the G-7,” the finance leaders' statement concluded. Suzuki said he and other leaders learned much from a seminar by Columbia University economist Joseph Stiglitz, a Nobel prize winner who worked in the Clinton administration and who has championed what he calls “progressive capitalism.” It's a "very interesting view," Suzuki said, adding that “so far, we’ve been mostly focused on GDP and other numerical indicators."

South Korea’s president wants to quickly overcome decades of lingering hostility left over from Japan’s past colonial rule of the Korean Peninsula and forge a united front to meet regional security and economic challenges facing the neighbors. “We cannot afford to waste time while leaving strained Korea-Japan relations unattended,” President Yoon Suk Yeol said in written response to questions posed by several foreign media outlets including The Associated Press. “I believe we must end the vicious cycle of mutual hostility and work together to seek our two countries’ common interests.” Yoon’s comments were provided Wednesday, a day before he travels to Tokyo for a closely watched summit with Japanese Prime Minister Fumio Kishida. The focus of attention is whether and what corresponding steps Kishida would take in response to Yoon’s recent plans to use South Korean funds to compensate some of the colonial-era Korean forced laborers without requiring Japanese contributions. Yoon’s push has triggered criticism from some victims and his domestic political rivals, who have called for direct compensation from Japanese companies that employed the forced laborers. But Yoon has defended his decision, saying greater ties with Japan is essential to tackle a slew of foreign policy and economic challenges. Also Read: Japan, S. Korea summit must overcome history to renew ties “There is an increasing need for Korea and Japan to cooperate in this time of a poly-crisis with North Korean nuclear and missile threats escalating and global supply chains being disrupted,” Yoon said. “I am confident that the Japanese government will join us in opening a new chapter of Korea-Japan relations which will go down to history.” Addressing Yoon’s comments, Japanese Chief Cabinet Secretary Hirokazu Matsuno said later Wednesday that Tokyo seeks to strengthen “strategic cooperation” with South Korea as well as trilaterally with the United States. He said he hopes that there will be “open-hearted exchanges” between the leaders of the two countries. South Korea and Japan, both key U.S. allies and vibrant democracies, are closely linked to each other economically and culturally. But their ties plunged to one of their lowest points in decades after South Korea’s Supreme Court in 2018 ordered two Japanese companies — Nippon Steel and Mitsubishi Heavy Industries — to compensate some of their former Korean employees for forced labor during the 1910-45 colonial rule. Japan has insisted all compensation issues were already settled by a 1965 treaty that normalized bilateral ties and was accompanied by $800 million in economic aid and loan from Tokyo to Seoul. The history disputes spilled over to other issues, with Tokyo placing export controls and South Korea threatening to terminate a military intelligence-sharing pact. Also Read: North Korea launches 2 missiles to sea as allies hold drills The feuding undermined a U.S. push to reinforce its alliances in Asia to better cope with North Korean nuclear threats and a Chinese rise. Since taking office last May, Yoon, a conservative, has been focusing on repairing ties with Japan, boosting the military alliance with the United States and building a stronger trilateral Seoul-Washington-Tokyo security cooperation. Yoon says those steps were needed to deter North Korea, whose nuclear-capable missiles put both South Korea and Japan within striking distance. Tensions with North Korea have further intensified recently, with the North test-firing a spate of missiles in protest of the South Korean-U.S. military drills that it views as an invasion rehearsal. “As North Korea’s nuclear development seriously threatens peace and security on the Korean Peninsula and beyond, it is more important than ever that the international community works on a concerted deterrence and responses – this includes the ROK-U.S. alliance and ROK-U.S.-Japan security cooperation,” Yoon said, invoking South Korea’s formal name. After Yoon’s government announced it would use money raised domestically to compensate the former forced laborers who won damages in the 2018 rulings, U.S. President Joe Biden hailed the plan as a major step toward enhancing the partnership between two of Washington’s closest allies. While experts say that North Korea’s aggressive weapons testing activities are aimed forcing the United States to accept it as a nuclear power and relaxing international sanctions, Yoon said Kim would fail to achieve this goal. “Since the complete denuclearization of North Korea is the clear and unchanging goal of the international community, the Republic of Korea will never acknowledge North Korea as a nuclear state under any circumstances,” Yoon said. He said Seoul, Washington and Tokyo are “continuously taking strong diplomatic, economic and military measures to show that the international community’s commitment to denuclearizing North Korea is stronger than North Korea’s commitment to the development of nuclear weapons.” Yoon also called on North Korea to halt its “reckless” nuclear program and take steps to address the suffering of its people. He said South Korea is willing to provide humanitarian assistance to North Korean people, citing an assessment “that food shortages there have grown worse with some regions seeing people dying of hunger recently.” Yoon expressed optimism that the thawing of diplomatic relations between South Korea and Japan would also expand economic cooperation between the technology-driven countries, which he said would be crucial to address industrial supply chain vulnerabilities and other global challenges. “If Korea-Japan relations are normalized, I expect to see acceleration of strategic cooperation, such as technological partnerships, joint research & development and the expansion of mutual investments in various fields, such as semiconductors, space and bio-health including materials, parts and equipment," he said. Yoon said expanded cooperation between South Korea and Japan – both semiconductor powerhouses – will contribute “greatly” in improving the resilience in global supply chains, which have been rattled by Russia’s invasion of Ukraine and COVID-19 and could be reshaped by an intensifying U.S.-China rivalry. Yoon also said South Korea and Japan while pursuing stronger bilateral ties should also seek to advance their economic relations with China in a “stable manner.” A government-affiliated foundation in South Korea will likely handle reparations to forced labor victims with money contributed by steel giant POSCO and other local companies that benefited from the 1965 accord. POSCO said Wednesday that it decided to newly contribute 4 billion won ($3 million) to the foundation in addition to the 6 billion won ($4.6 million) that it has previously contributed to the foundation. South Korean officials say they don't expect Nippon Steel or Mitsubishi to immediately contribute to the South Korean funds for the forced labor victims. They say they expect the Japanese companies to participate in a separate possible fund aimed at facilitating cultural exchanges and other cooperation between the two countries.

The UK Government has launched a new programme to help high street businesses, including Marks & Spencer, Sainsbury’s, Tesco, Morrisons, Co-op and Waitrose, to strengthen their global supply chains by supporting workers in developing countries during the coronavirus pandemic.