Beijing says it’s investigating fashion retailer PVH Corp, the owner of Calvin Klein and Tommy Hilfiger, for refusing to source cotton from the Xinjiang region, in a move that could lead to sanctions on an American company with major business interests in China.

China will launch an investigation into PVH, the parent company of Calvin Klein and Tommy Hilfiger, for suspected violations of market trading principles regarding Xinjiang-related products, the commerce ministry said on Tuesday.

The Commerce Ministry says PVH Group violated the principles of normal market transactions by prohibiting sourcing from the Chinese region, where there have been allegations of forced labor.

Beijing says it suspects US brands are discriminating against Chinese cotton after allegations of forced labour.

The ministry said that the firm is "unjustly boycotting" Xinjiang products "without a factual basis." China's commerce ministry said it will investigate PVH, the parent company of Calvin Klein and Tommy Hilfiger,