by Dan McCaleb
Lawmakers and consumer advocates are calling for a federal investigation into online Chinese retailers Temu and Shein.
The companies have spent billions of dollars in online American advertising with social media companies such as Meta, parent of Facebook and Instagram, and Google. The probe is warranted, critics say, because of anti-competitive practices skirting U.S. trade and public safety regulations; alleged use of slave laborers to make products sold at cut-rate prices; and advertising targeting children, low-income families and older Americans.
The companies – Temu is backed by the Chinese Communist Party – are accused of offering direct-to-consumer products that often don’t meet U.S. safety standards at costs well below market value. Items listed for sale include beauty products for young women and girls for as low as a penny, and kids clothing for less than $10, well below average American direct-to-consumer merchants’ prices such as can be found at Amazon and other outlets.
U.S. Sen. Marco Rubio, R-Fla., last month asked U.S. Department of Homeland Security Secretary Alejandro Mayorkas to investigate Shein and Temu and add them to the Uyghur Forced Labor Prevention Act list of violators.
“It is past time for the Forced Labor Enforcement Task Force to begin adding entities to the UFLPA exporter list,” Rubio said. “Private firms and journalists have unearthed compelling evidence that both Shein and Temu are facilitating the entry of goods made with Uyghur forced labor.”
Robert Bork Jr., president of the Antitrust Education Project, a consumer rights advocacy group, said the Chinese retailers are stealing market share from legitimate companies who don’t use slave labor and follow safety regulations. He said they should be stopped.
“China is spending billions of dollars to reach into the American retail market,” Bork told The Center Square. “That, in and of itself, is acceptable – if we’re dealing with a normal country. What isn’t acceptable is to use slave labor and a disregard for consumers’ health to gouge market share from reputable American and European businesses that don’t rely on slave labor and don’t sell contaminated products.”
Shein moved its headquarters to Singapore in an attempt to distance itself from China, the New York Times reported in 2023.
The U.S.-China Economic and Security Review Commission reported that “Shein products pose health hazards and environmental risks” to American consumers because they use materials containing high levels of potentially hazardous chemicals, including lead, perfluoroalkyl (PFA), and phthalates. The commission also has raised concerns about the sites posing personal security risks related to potential data breeches.
By shipping directly to consumers, the companies avoid normal customs processes, allowing them to skip paying import taxes and regulatory safety checks.
Health Canada tested a Shein jacket for toddlers and found it to have 20 times the amount of lead considered safe for children. Greenpeace released a study saying chemicals used in some Shein products exceeded levels permitted by European Union regulations.
Rubio wrote, in part, to Mayorkas, “Given the blatant exploitation of trade loopholes that Shein and Temu regularly demonstrate, and the high probability these companies have facilitated the importation of goods made with forced labor, I urge you to investigate these companies and add them to the exporter list … should they be in violation of federal law.”
In a statement to AARP, Temu said it complies with ethical labor practices.
Bork called on the federal government to take action.
“If the Federal Trade Commission could peel itself away from leveling cases against this nation’s most successful companies, it should take action against Temu and Shein for unfair and deceptive trade practices,” Bork told The Center Square. “Unfair, because coerced labor is the secret sauce behind their lower prices. Deceptive, because few consumers expect to be exposed to chemicals in their garments that have been regulated in the United States for years.”
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Dan McCaleb is Executive Editor at The Center Square.
Background Photo “Temu Website” by Temu.
