HomeOppression and Human RightsCongressional Probe Exposes Forced Labor in Chinese-base Shein and Temu Shopping Platforms

Congressional Probe Exposes Forced Labor in Chinese-base Shein and Temu Shopping Platforms

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A congressional investigation has exposed the serious violations of U.S. law by Chinese shopping platforms, Temu and Shein. These popular online marketplaces have come under scrutiny for facilitating the influx of cheap and unregulated products, many of which are believed to be produced using forced labor. The report, released by the House Select Committee on the Chinese Communist Party, reveals alarming findings that shed light on the rampant disregard for supply chain compliance within these platforms.

Temu, a rapidly growing Chinese shopping site offering a wide range of goods such as electronics, makeup, toys, and clothing, has been singled out as a major offender. The committee’s report accuses Temu of maintaining a supply chain contaminated with forced labor, highlighting the site’s failure to establish an effective compliance program. This revelation raises concerns about the regular shipment of products made with forced labor into the United States through Temu’s platform.

The ongoing investigation into forced labor in supply chains connected to China prompted lawmakers to include responses from Temu, Shein, Nike, and Adidas in the report. While the investigation covers multiple entities, the assessment of Temu’s operations has been particularly scathing, emphasizing the significant risk associated with its supply chains.

Lawmakers have also expressed alarm at Shein’s utilization of an importing method known as de minimis, which allows duty-free entry of products valued under $800, with minimal scrutiny from customs. This shipping channel has faced criticism for its potential exploitation by companies shipping goods from China. Calls to close off this loophole have gained traction, given its role in facilitating the flow of products into the United States with reduced transparency and oversight.

Representative Mike Gallagher, the Wisconsin Republican leading the committee, has expressed his deep concerns over the lack of action by Temu and Shein. He asserts that Temu has neglected its responsibility to ensure slave labor-free supply chains while capitalizing on the de minimis loophole to evade import taxes and avoid scrutiny.

Temu’s operations in the United States began just last year, but the platform has quickly gained momentum, boasting millions of shipments annually through a vast network of suppliers. By connecting Chinese factories directly with U.S. consumers, Temu offers attractively priced products, ranging from clothing and electronics to temporary tattoos and modeling clay. The report sheds light on the company’s heavy reliance on the de minimis rule, allowing them to sell goods at cheaper prices while bypassing duties, taxes, and government fees.

The de minimis shipping method presents challenges for U.S. customs officials as it requires less information disclosure about the products and companies involved. Consequently, detecting packages containing narcotics, counterfeits, or goods made with forced labor becomes increasingly difficult. The report highlights the alarming rise in de minimis packages entering the United States, reaching 720 million in 2021, up from 220 million in 2016.

Analysis of data provided by the companies reveals that Temu and Shein alone are responsible for shipping nearly 600,000 packages daily to the United States under the de minimis rule. This volume represents a substantial portion of global de minimis shipments to the United States and demonstrates the significant role these platforms play in the Chinese market.

Both Shein and Temu have emerged as formidable competitors to traditional brick-and-mortar retailers, winning over younger consumers with their sophisticated e-commerce technology and vast product offerings. A Piper Sandler report ranks Shein as the third most popular e-commerce site among teenagers, trailing only behind Amazon and Nike. However, their growing popularity has also attracted congressional scrutiny due to their ties to China.

The congressional investigation has raised questions about the relationship between these companies and the Chinese government and Communist Party. Lawmakers are concerned about the ability of Shein and Temu to ensure their supply chains are free from materials or products sourced from Xinjiang, a region notorious for its use of forced labor. The U.S. government has banned products from Xinjiang due to evidence of forced labor in its factories and mines.

While Shein claims to have a zero-tolerance policy for forced labor and denies sourcing cotton from Xinjiang, a Bloomberg News investigation last year revealed that some Shein clothing was indeed made with Xinjiang cotton. Shein responded by stating its compliance with local laws and engaging a lab to test its materials. Temu, on the other hand, has failed to establish an auditing system that can independently verify the absence of Xinjiang-sourced products in its supply chain.

Temu’s argument that it bears no responsibility as the importer of record for goods shipped to the United States is deeply troubling. The report highlights a key chain listed on Temu’s website labeled “pendant with Xinjiang cotton,” indicating a potential violation of the U.S. ban on Xinjiang goods. Temu’s permissive stance toward products explicitly advertising their Xinjiang origins raises serious questions about its commitment to addressing forced labor concerns.

The revelations from this congressional investigation have sent shockwaves through the industry, urging a reevaluation of supply chains and highlighting the need for stricter regulations. As Temu and Shein continue to expand their influence and challenge established retailers, the pressure to address these forced labor concerns will only intensify. The spotlight on these Chinese shopping sites underscores the necessity for greater transparency, compliance, and ethical sourcing practices within the global marketplace.

https://www.dol.gov/agencies/ilab/against-their-will-the-situation-in-xinjiang

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