Congress Spotlights Forced Labor Concerns With Chinese Shopping Sites Shein and Temu

Lawmakers say Temu, China’s popular shopping platform, is likely to violate U.S. law in gross violations, offering an unchecked route to allow goods made with forced labor to enter the U.S. are accused of doing so.

and report released ThursdayA special committee of the Chinese Communist Party’s House of Representatives said Temu, a fast-growing site that sells electronics, cosmetics, toys and clothing, has “failed to maintain even the surface of a meaningful compliance program” in its supply chain. said it was likely. It “regularly” ships products made with forced labor to the United States.

The report stems from an ongoing investigation into forced labor in supply chains involving China. Lawmakers said the report was based on responses submitted to the commission by Tem, as well as fast-fashion retailers Shine, Nike and Adidas.

The report made a particularly scathing assessment of Temu, saying that “the risk of Temu’s supply chain being contaminated with forced labor is extremely high”. The site advertises with the tagline “shopping like a millionaire” and is currently his second most downloaded app in the Apple store.

Lawmakers also said Shayne’s import method would allow companies to bring products into the U.S. tax-free and with less customs scrutiny, as long as the package is sent directly to the consumer and is worth less than $800. criticized that Some lawmakers are pushing for the closure of the transport route. called deminimisfor businesses that ship goods from China.

Lawmakers said they were baffled by what the bipartisan commission’s investigation has revealed so far.

Wisconsin Republican Rep. Mike Gallagher, chairman of the committee, said tem did little to protect its supply chain from slave labor. “At the same time, Tem and Shane are building an empire around minimal loopholes in import rules that evade import duties and evade scrutiny on the millions of goods they sell to Americans.”

Temu, which launched operations in the U.S. last September, now brings millions of shipments to the U.S. annually through a network of more than 80,000 suppliers that sell directly from factories in China to U.S. consumers. told the committee. The site sells clothing, temporary tattoos, modeling clay, electronics, and other items directly to consumers at prices as low as $3 for baby rompers, $6 for sandals, and $8 for vacuum cleaners. increase.

The report states that Tim and Shane minimum rules. This shipping method allows retailers to sell their goods to consumers at lower prices as there are no customs duties, taxes or government fees, unlike traditional retailers who typically ship goods overseas in bulk.

De Minimis Shipping also requires far less information to be disclosed about the goods and the companies involved in the transaction, and it can be difficult for U.S. customs officials to find drug-laden packages, counterfeit goods, and goods made with forced labor. becomes difficult. The number of minimiss parcels entering the United States has exploded in recent years, from 220 million in 2016 to 720 million in 2021.

Based on data provided by both companies, the report said Tem and Shane alone are likely responsible for about 600,000 packages shipped to the U.S. each day under the de minimis rule. said.

These shipments accounted for more than 30 percent of global minimiss shipments to the United States last year, and nearly half of such parcels came from China, according to the report.

By investing in sophisticated e-commerce technology and offering hundreds more new products than their competitors, both Shein and Temu have steadily captured market share from U.S. brick-and-mortar retailers and driven young consumers. has fascinated people. According to Shein, among teenagers, she was her third most popular e-commerce site after Amazon and Nike. Piper Sandler Report Issued this spring.

As companies have grown in popularity, so has congressional scrutiny of them because of their ties to China. Originally based in China, Shein has moved its headquarters to Singapore. Based in Boston, Temu is a subsidiary of PDD Holdings. moved the head office From China to Ireland this year.

Lawmakers have questioned their ties to the Chinese government and Communist Party, as well as companies’ ability to scrutinize their supply chains to ensure they do not contain materials or products from Xinjiang. Last year, the United States imposed a ban on products from Xinjiang, citing forced labor in Xinjiang’s factories and mines.

The Chinese government has carried out crackdowns against Xinjiang Uighurs and other ethnic minorities, including the systematic use of forced labor for cotton picking. work in a mine. We also manufacture electronic components, polysilicon and auto parts. For this reason, the U.S. government now presumes that all materials in the area were produced by forced labor, unless proven otherwise.

Shein has previously said he has zero tolerance for forced labor, does not source cotton from Xinjiang, and fully complies with all U.S. tax and trade laws.Bloomberg News survey last November i found that Laboratory tests revealed that some of Shine’s clothes were made of cotton from Xinjiang. Shayne did not dispute Bloomberg’s test results, but said in a statement to Bloomberg that Bloomberg has taken steps to comply with local laws in all global markets, and that testing of materials includes He said he had a contract with another research institute, Oritein.

The congressional report also criticized Tem for not setting up compliance and audit systems that could independently verify that its sellers were not sourcing products from Xinjiang.

Tem told the commission that the company has a reporting system that consumers and sellers can use to file complaints, and that sellers have a “zero tolerance policy” against the use of forced, indentured and penalized labor. He said he was asking them to sign a code of conduct that stated: However, the code of conduct does not mention Xinjiang or the U.S. ban, and Tem told a House committee that vendors are not prohibited from selling products manufactured in Xinjiang, the report said. says.

Tam also argued that the use of direct-to-consumer delivery means that the ultimate responsibility for compliance with the ban on Xinjiang products rests with US consumers, not Mr. Tam.

“Tem is not the importer of record for goods shipped to the United States,” the report said.

The commission’s report also includes a photo of a key ring, which was posted on Temu’s website this month and is labeled “a pendant made from Xinjiang cotton.”

The keychain itself is shaped like a cotton bud, and the report said the Xinjiang label “may indicate the material, supplier, pattern or origin of the product.” The paper added, “Despite increased parliamentary and public scrutiny of related subjects, Temu’s policy of not banning the sale of products that explicitly advertise their Xinjiang origin raises serious questions.” added.

The New York Times was unable to independently verify whether its products were made using Xinjiang cotton, which is prohibited by US law. Identical products allegedly made in Henan province, outside Xinjiang, have been listed on Chinese wholesale sites, according to The Times.

Jordyn Holman contributed to the report.

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