Are Shein and Temu ‘problematic’ due to forced labor?

WASHINGTON (NewsNation) — The fast-fashion market has shifted away from American and European brands to Chinese online retailers like Shein and its newer rival Temu.

They’re in a race to win shoppers’ attention for their novel China-made goods, yet it’s not the $5 jeans that have lawmakers looking into two of the fastest-growing retailers in the world. Instead, they’re “problematic” due to forced labor and privacy issues.

The battle between them is playing out on social media and in a U.S. court, but there’s also controversy around alleged labor abuses.

“They’ve overtaken the app store. So if you go on the app store, they’ll be at the top. If not number one and number two,” said Elizabeth Brotherton-Bunch, senior vice president for communications at the Alliance for American Manufacturing. “We have a number of concerns, however, with Shein and Temu.”

Brotherton-Bunch said if the fast-fashion online retailers’ extremely low prices seem too good to be true, it’s because they are. These goods are much more expensive, even if American customers aren’t paying the higher prices.

“It’s becoming more and more clear that they are reliant on forced labor to make their products,” Brotherton-Bunch said.

She said most of the apparel from China stems from Xinjiang Province, an area where the U.S. State Department said there is a genocide happening.

Members of the Muslim minority Uyghur population are often forced into prison and labor camps to produce the very goods that enter the U.S. through these apps.

“This is really serious stuff; if you listen to survivors from these forced labor camps,” said Rep. Haley Stevens (D-MI).

In December 2022, Shein said it planned to invest $15 million to improve working conditions at factories in its supply chain. Over the next three to four years, the money would be spent to physically upgrade hundreds of factories belonging to its suppliers, the company said in a statement.

The move came in response to a UK documentary, which was released in October 2022, that alleged staff at Shein’s factory suppliers in China worked 15 hours a day making pennies per item, CNN reported.

Stevens, who serves on the Select Committee on China, said not only are the fast-fashion retailers using forced labor, but they also exploit a tax loophole.

Bulk sales from China over $800 are subject to American tariffs, but because each Shein and Temu sale is processed individually and cheaply, both companies are able to sell hundreds of millions of dollars worth of clothes in the U.S. tariff-free.

Stevens said regardless of how popular they are, Congress should act to limit how these apps operate in the U.S., as it’s doing with TikTok.

“I think this is a way to hold the Chinese Communist Party accountable for, frankly, their gross abuse,” Stevens said.

This comes as Congress debates an all-out TikTok ban. U.S. lawmakers have expressed concerns that TIkTok, which is owned by the Chinese company ByteDance, may endanger sensitive user data.

“Is it the law in China that if it is a Chinese company, the Chinese communist party has to have access to all that information, all that data, all of their leadership? So Americans should know, this is not just TikTok,” said Sen. James Lankford (R-Okla.).

Lankford assured NewsNation they’re aware of the pitfalls of other Chinese-owned apps, like Temu and Shein; however, it’s unclear whether Congress will take action against them, too.

NewsNation’s Taylor Delandro contributed to this report.