‘It’s a threat to American producers, investors, online retailers, and every single American’s personal privacy,’ says Sen. Tom Cotton.
Sens. Tom Cotton (R-Ark.) and Marco Rubio (R-Fla.) have called on the Biden administration to investigate two major Chinese fashion retail apps, Temu and Shein, amid concerns over forced labor, human rights abuses, and intellectual property theft.
In a
letter dated April 15 to President Joe Biden, Mr. Cotton raised concerns about Temu’s alleged unfair trade practices, intellectual property theft, and human rights abuses.
“Temu’s goods are cheap not because of fair competition, but rather because of China’s familiar combination of intellectual-property theft, government subsidies, and human rights abuses,” Mr. Cotton said.
Temu is a fast-fashion online retailer that directly ships products to customers at significantly low prices. It is owned by Chinese e-commerce giant PDD Holdings. After the app was launched in 2022, Temu has become one of the most downloaded apps in the United States.
Like Shein, the key to Temu’s success is a trade exemption known as the de minimis rule. This U.S. trade exemption allows online retailers to ship small packages worth $800 or less directly to shoppers without paying tariffs. The exemption allows websites selling cheap Chinese goods to evade millions of dollars in taxes and fees and regulations banning forced labor in the consumer product supply chain.
In the letter, the Arkansas senator warned of the threat the Temu app poses to Americans.
“As with TikTok and other invasive Chinese apps, Temu has no place in America. It’s a threat to American producers, investors, online retailers, and every single American’s personal privacy,” Mr. Cotton wrote.
Mr. Cotton urged President Biden to end the de minimis loophole. Additionally, he requested information regarding the Chinese regime’s influence over Temu, Temu’s connection to the Chinese Communist Party (CCP), and the extent to which Temu is involved in stealing and counterfeiting American products, among other inquiries.
Uyghur Forced Labor Prevention Act
In another letter dated April 16, Mr. Rubio asked Homeland Security Secretary Alejandro Mayorkas to investigate Temu and Shein for allegedly violating the Uyghur Forced Labor Prevention Act (UFLPA).
The UFLPA, which went into effect in June 2022, prohibits imports from China’s Xinjiang region unless companies can prove their products were not produced with forced labor. The UFLPA requires the Department of Homeland Security to ban imports using Uyghur forced labor by adding violators to the UFLPA entity list.
In the letter, the Florida senator raised concerns that although the UFLPA was signed into law over two years ago, no company has been added to the UFLPA entity list. Mr. Rubio then called on Mr. Mayorkas to add Temu and Shein to the entity list if they violated the law.
Last year, the House Select Committee on the Chinese Communist Party (CCP) released a report accusing Temu of using forced labor.
“Temu does not have any system to ensure compliance with the Uyghur Forced Labor Prevention Act (UFLPA),” the report reads. “This all but guarantees that shipments from Temu containing products made with forced labor are entering the United States on a regular basis, in violation of the UFLPA.”
According to the
report, over 685 million shipments entered the United States under de minimis in 2022. Temu and Shein likely represent more than 30 percent of all de minimis shipments into the United States, and nearly half were from China.
Last year, a bipartisan group of lawmakers also sent a
letter to the Securities and Exchange Commission to urge the agency to audit Shein over the alleged use of Uyghur force labor in its products.
A 2022
Bloomberg report said Shein allegedly used cotton from forced labor in Xinjiang. The United States banned cotton importation from Xinjiang for “horrific abuses” against the Uyghurs.
A
report from the U.S.–China Economic and Security Review Commission last year revealed concerning practices by Temu and Shein, including forced labor, intellectual property rights violations, and exploitation of trade loopholes.
Shein also faces lawsuits from its competitors and designers for alleged copyright violations. In July 2023, three independent designers accused Shein of racketeering activity and copying their work without permission “for massive financial gain.”
Also, in July 2023, Temu sued Shein, accusing the latter of being involved in an “anticompetitive scheme” to hinder Temu’s business.
Earlier this year, Japanese retailer Uniqlo sued Shein for allegedly unlawfully replicating its popular “Mary Poppins bag.”
The Epoch Times has reached out to Shein and Temu for comment.
Frank Fang contributed to this report.
