Online retailers Shein and Temu are facing increased pressure after two senior politicians pushed for an investigation over claims of forced labor and intellectual property (IP) theft.
Texas state attorney General Ken Paxton launched a probe into allegations of forced labor and the use of unsafe materials at Shein. Meanwhile at a national level, Senator Tom Cotton called for a federal investigation into possible IP theft at both Shein and Temu, which he labeled “Communist Chinese” platforms. Cotton sent a letter to Attorney General Pam Bondi on Monday calling for the U.S. Departments of Justice and Homeland Security to investigate online retailers Shein and Temu, which ship most of their merchandise from China, for wide-scale intellectual property theft and counterfeiting.
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President Donald Trump abolished the longstanding “de minimis” rule, a global tariff exemption widely used by buyers of low-cost goods. These shipments are subjected to levies and stricter customs checks. Cotton, a key Trump-ally, and vocal critic of China said the new regulations gives the Department of Justice and Homeland Security a “golden opportunity” to act. He also mentions that designers and small American brands have accused Shein of systematically copying their original creations, often just days after launch, and selling them at a fraction of the price.
Cotton also claimed Temu is carrying “sophisticated and deceptive fakes” on its platform, which has hundreds of millions of users. He cited a U.S. investigation which found a significant proportion of items that its researchers bought on Shein and Temu were likely counterfeits.
Paxton separately said that numerous reports have raised serious concerns about Shein’s alleged reliance on forced labor, and claims of the use of unsafe materials and deceptive marketing. He also said the investigation will assess if Shein’s practices violate Texas law by allegedly using hazardous materials and if it has misled consumers about ethical sourcing. The probe will also examine Shein’s data collection practices, he added. “I will not allow cheap, dangerous, foreign goods to flood America and jeopardize our health,” said Paxton online.
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While Shein said it took concerns about its business practices seriously, Temu did not comment, according to a BBC report. Shein said in a statement: “We welcome constructive engagement with Attorney General Paxton,” Shein said in a statement.
Shein and Temu had already been facing scrutiny following the end of a U.S. trade exemption that helped both companies gain popularity in the region. Shein is privately held and Temu is owned by PDD Holdings. While Shein is headquartered in Singapore, most of the goods sold on its platform are made in China, where it was founded.
The European Commission said in July that Temu was breaking EU rules by not doing enough to prevent the sale of counterfeit goods on its platform. The company said at the time that it would fully cooperate with the commission.
French authorities also reportedly flagged the sale of childlike sex dolls and weapons on Shein’s third-party marketplace. The European Union called on the company to stop the sale of these products following that. Temu is also being investigated in France over the spread of harmful content accessible to young people.