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Lawmakers are flagging what they say are likely significant violations of U.S. law by Temu, a popular Chinese shopping platform, accusing it of providing an unchecked channel that allows goods made with forced labor to flow into the United States.
In a report released Thursday, the House Select Committee on the Chinese Communist Party said Temu, a rapidly growing site that sells electronics, makeup, toys and clothing, had failed “to maintain even the facade of a meaningful compliance program” for its supply chains and was likely shipping products made with forced labor into the United States on a “regular basis.”
The report stems from a continuing investigation into forced labor in supply chains that touch on China. Lawmakers said the report was based on responses submitted to the committee by Temu, as well as the fast fashion retailer Shein, Nike and Adidas.
The report offered a particularly scathing assessment of Temu, saying there is an “extremely high risk that Temu’s supply chains are contaminated with forced labor.” The site advertises itself under the tagline “Shop like a billionaire” and is now the second most downloaded app in the Apple store.
The report also criticized Shein’s use of an importing method that allows companies to bring products into the United States duty-free and with less scrutiny from customs, as long as packages are sent directly to consumers and valued at under $800. Some lawmakers have been pushing toclose off this shipping channel, which is called de minimis, for companies sourcing goods from China.
Lawmakers said that they were troubled by what the bipartisan committee’s investigation had uncovered so far, and that Congress should review import loopholes and strengthen forced labor laws.
“Temu is doing next to nothing to keep its supply chains free from slave labor,” saidRepresentative Mike Gallagher, a Wisconsin Republican who heads the committee.“At the same time, Temu and Shein are building empires around the de minimis loophole in our import rules:dodging import taxes and evading scrutiny on the millions of goods they sell to Americans.”
“The initial findings of this report are concerning and reinforce the need for full transparency by companies potentially profiting from C.C.P. forced labor,” said Representative Raja Krishnamoorthi, an Illinois Democrat and a co-author of the report, referring to the Chinese Communist Party.
Temu, which began operating in the United States in September, told the committee that it now brought millions of shipments into the United States annually through a network of more than 80,000 suppliers that sell directly from Chinese factories to U.S. consumers. The sitesells clothing, temporary tattoos, modeling clay, electronics and other items directly to consumers for low prices, like $3 for a baby romper, $6 for sandals and $8 for a vacuum.
The report also contained new data showing that Temu and Shein make heavy use of the de minimis rule, together accounting for almost 600,000 such packages shipped to the United States daily.
The shipping method allows retailers to sell their goods to consumers at cheaper prices, since they are not subject to duties, taxes or government fees that apply to traditional retailers that typically ship overseas goods in bulk.
De minimis shipping also requires far less information to be disclosed about the products and the companies involved in the transaction, making it harder for U.S. customs officials to detect packages with narcotics, counterfeits and goods made with forced labor.The number of de minimis packages entering the United States more than tripled between 2016 and 2021, when it reached 720 million.
At an annualized rate, the shipments reported by Shein and Temu would represent more than 30 percent of the de minimis shipments that came into the United States last year, and nearly half of those packages from China, the report said.
Both Shein and Temu have steadily taken market share from U.S. brick-and-mortar retailers and won over younger consumers by investing in sophisticated e-commerce technology and offering hundreds more new products than competitors. Among teenagers, Shein was the third most popular e-commerce site behind Amazon and Nike, according to a Piper Sandler reportthis spring.
As their popularity has grown, so has congressional scrutiny of the firms, given their ties to China. Shein was originally based in China but has moved its headquarters to Singapore. Temu, which is based in Boston, is a subsidiary of PDD Holdings, whichmoved its headquarters to Ireland from China this year.
Lawmakers have been questioning their relationship with the Chinese government, as well as the companies’ ability to vet their supply chains to ensure they don’t contain materials or products from Xinjiang. Last year, the U.S. imposed a ban on products from Xinjiang, citing the region’s use of forced labor in factories and mines.
The Chinese government has carried out a crackdown in Xinjiang on Uyghurs and other ethnic minorities, including the organized use of forced labor to pick cotton; work in mines; and manufacture electronics, polysilicon and car parts. Because of this, the U.S. government now presumes all materials from the region to be made with forced labor unless proved otherwise.
Shein said in a statement that it had zero tolerance for forced labor and had a robust compliance system, including a code of conduct, independent audits, robust tracing technology and third-party testing. It provided detailed information to the House committee and will continue to answer its questions, the company said.
“We have no contract manufacturers in the Xinjiang region,” it said. “As a global company, our policy is to comply with the customs and import laws of the countries in which we operate.”
Temu did not respond to a request for comment.
Laboratory tests commissioned by Bloomberg News in November found that some Shein clothing had been made with cotton from Xinjiang. Shein didn’t dispute those findings, but said in a statement to Bloomberg that it took steps in all global markets to comply with local laws and had engaged another lab, Oritain, to test its materials.
The congressional report also criticized Temu’s failure to set up a compliance or auditing system that could independently verify that its sellers were not sourcing products from Xinjiang.
Temu told the committee that it had a reporting system that consumers and sellers could use to file complaints, and that it asked its sellers to sign a code of conduct specifying a “zero-tolerance policy” for the use of forced, indentured or penal labor. Temu’s code of conduct also says the company reserves the right to inspect factories and warehouses to ensure compliance.
But the code does not mention Xinjiang or the U.S. ban, and Temu told the House committee that it did not prohibit vendors from selling products made in Xinjiang, the report said.
Temu also argued that its use of direct shipping meant that the U.S. consumer, not Temu, would bear the ultimate responsibility for adhering to the ban on Xinjiang goods.
“Temu is not the importer of record with respect to goods shipped to the United States,” the report quoted it as saying.
Customs lawyers said that it was not entirely clear which party would be liable for complying with the U.S. ban, but that any company facilitating the importation of goods from Xinjiang could face civil or criminal penalties.
The committee report also pictured a key chain that was listed on Temu’s website this month and labeled “pendant with Xinjiang cotton.” The key chain itself is shaped like a bud of cotton, and the report said that the Xinjiang label “may refer to the materials, the supplier, the pattern or the origin of the product.”
Temu’s “policy to not prohibit the sale of products that explicitly advertise their Xinjiang origins, even in the face of mounting congressional and public scrutiny on related topics, raises serious questions,” the report said.
The New York Times was not able to verify whether the product is made using Xinjiang cotton, which is barred under U.S. law. The Times found an identical product listed for sale on a Chinese wholesale site that was described as manufactured in Henan Province, outside Xinjiang.
A Times review of information shared by Temu vendors on Chinese social media sites also suggested that Temu did not require sellers to provide detailed information about where their products were made or which companies manufactured them.
Vendors sharing tips online about Temu’s product review process gave several reasons that Temu commonly rejected new listings: for example, if the price was too high, if the samples were inconsistent with the photos or if the goods lacked consumer warning labels. But none mentioned concerns about links to Xinjiang or the U.S. import ban.
Jordyn Holman contributed reporting from New York.
Ana Swanson is based in the Washington bureau and covers trade and international economics for The Times. She previously worked at The Washington Post, where she wrote about trade, the Federal Reserve and the economy. @AnaSwanson
Claire Fu covers news in mainland China for The New York Times in Seoul. @fu_claire
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The fast-fashion company has come under fire for accusations of mistreatment of Uyghurs, a marginalized group in China, and for allegedly falsifying reports of forced or underpaid labor of its supplier factories, some of which are allegedly located in the Xinjiang Uyghur Autonomous Region of China.Does Temu use forced labor? ›
The report says American consumers should know that there is an extremely high risk that Temu's supply chains are contaminated with forced labour.Why are we boycotting Shein? ›
The pressure to comply with the immense output demanded by Shein falls squarely on the shoulders of exploited Chinese garment workers. The company has violated Chinese labor laws, forcing 75-hour work weeks on its employees, far over the 40-hour legal limit.Is it unethical to buy from Shein? ›
Despite gargantuan profits, SHEIN HAS been accused of stealing designs from small independent labels, selling offensive items including Islamic prayer rugs as decorative mats and swastika necklaces, selling items containing unsafe amounts of lead, and forcing garment workers to work in extremely unethical conditions.Is Temu owned by Shein? ›
Temu, which means “Team Up, Price Down,” garnered a lot of attention in the US after its first Super Bowl advertisement in February, attracting new customers and further establishing its presence in the e-commerce industry. Is Temu owned by Shein? No, Temu and Shein are two unrelated platforms.Does Temu track you? ›
As you shop, Temu quietly bypasses any firewall and gains access to your location and can track you. It gets full access to all your contacts, calendars and photo albums, plus your social media accounts, chats and texts.What companies don't use forced labor? ›
- Accessories. Aruna. Parker Clay. Fair Tribe. ...
- Baby Accessories. The Little Sparrow.
- Active / Outdoor. Yellow Leaf Hammocks. Patagonia. Prana.
- Bath & Body. Zambeezi. Lush. Thistle Farms. ...
- Clothing. Everlane. Slumlove. Bluer Denim. ...
- Coffee. Café Justo. Equal Exchange.
- Drink. BrewDog. Fair Spirits. ...
- Electronics. Fair Phone.
This overconsumption isn't just leading to overflowing landfills and dumping used clothes in Africa, it's also wasting enormous amounts of water, energy, and CO2 emissions to make new clothes that will only be discarded soon after. From the fabrics to the manufacturing and the shipping, SHEIN is bad for the planet.What is the harms of Shein? ›
Put simply, Shein produces an astounding number of items on a daily basis—the primary reason why the company has an unsustainable model. Shein's CEO, Molly Miao has stated that each item is produced only in small numbers, between 50-100 pieces a day, before it becomes popular and is then mass-produced.Is Shein out of the US? ›
Shein is a company from China. While it has a base in China, there is no physical store or chain of shops responsible for managing orders.
Shein launched an investigation after U.K. Channel Four documentary Untold: Inside The Shein Machine alleged that workers were subject to 16-hour-long days, got one day off a month, and earned wages of around 4,000 yuan ($572) per month to produce hundreds of garments for the online retailer each day.What does Shein do to their workers? ›
Workers in both factories were working up to 18-hour days and were given only one day off a month. In one factory, the outlet found women washing their hair during lunch breaks, and workers were penalized two-thirds of their daily wage if they made a mistake on a clothing item.Does Shein have child workers? ›
Does Shein use child labor? Unfortunately the answer is, more than likely. China, like the US, has child labor laws that prohibit employment for children under 16, restrict children from working in hazardous environments, and limit the number of hours children in school can work.What is the controversy around Shein? ›
Along the way, the e-commerce retailer has also gained vocal critics who have questioned, among other things, its connection to China, accused it of stealing designers' works and pointed to how its cheap merchandise contributes to environmental waste. Shein, for the most part, has been tight-lipped through it all.What are the ethical issues with Shein? ›
The environmental impact of SHEIN is one of the primary issues. SHEIN manufactures a tonne of apparel as a fast-fashion company, much of it is produced from synthetic materials that do not biodegrade. Also, the business's manufacturing and shipping methods could pollute the air and water.What is the Shein Labour controversy? ›
However, bipartisan American lawmakers have raised concerns about Shein's production practices and called for an investigation into allegations of exploitation and forced labour. The controversy revolves around the use of cotton from China's Xinjiang region, which has been boycotted due to human rights concerns.Does Shein have labor issues? ›
Does Shein violate labor laws? Yes, investigations into factories producing Shein garments have discovered multiple labor violations. One UK investigation into a factory producing Shein clothing found that their workers were paid a base salary of $556 US a month, while their first month's pay was withheld from them.Where does Shein get their clothes from? ›
The company mainly sourced its clothing from China's wholesale clothing market in Guangzhou. However, Shein became a fully integrated retailer in 2014 when it secured its supply chain system. Now, the company utilizes a network of manufacturing partners and suppliers to make and deliver its products.What is Shein being sued for? ›
Fast-fashion brand Shein, owned by the China-based company Zoetop Business Co., agreed to settle a copyright infringement lawsuit brought by an artist who claimed the company sold wall paintings containing her art without permission.Who owns Shein? ›
Who owns Shein? Shein is owned by parent company Nanjing Lingtian Information Technology, although the company's ownership is frequently branded a mystery. It remains a private company, with four major shareholders so far: JAFCO Asia, IDG Capital, Sequoia Capital China, and Tiger Global Management.
By outsourcing labor, clothing retailers can cut costs and boost profits by paying workers less. And, when labor costs are cut, product costs can be cut, too, leading to super affordable clothing. In short, Shein produces its clothes in generic wholesale factories to keep its costs at a minimum.What brands are facing ethical issues? ›
- Pull & Bear.
- Massimo Dutti.
- Zara Home.
In one factory, Channel 4 found that workers receive a base salary of 4,000 yuan per month — roughly $556 — to make 500 pieces of clothing per day and that their first month's pay is withheld from them; in another factory, workers received the equivalent of four cents per item.Why are people buying SheIn? ›
It's much cheaper to manufacture clothes in China than it is in the U.S. This is why SheIn can afford to set lower price points than other clothing brands can. At SheIn, you get what you pay for. SheIn uses lower-quality materials to make their clothing, which keeps costs down and prices low.Does Target use child labor? ›
Cotton Origin Policy. Target does not knowingly buy or sell products that are made, in whole or in part, using forced or underage labor.Why is Shein being investigated? ›
Fast-fashion giant Shein is the latest company to face increased scrutiny from Washington, after a sprawling report by a Congressional committee investigating China detailed allegations of copyright infringement and unfair labor practices.Is Shein banned in China? ›
Shein was banned alongside other Chinese apps in 2020 over data privacy and security concerns. After the ban, Shein products continued to be available on the Amazon e-commerce site.What are the working conditions in China? ›
According to China's labour laws, a standard work day is eight hours-long, with a maximum of 44 hours a week. Any work beyond that requires extra pay for overtime. But this has not been well enforced.