From: lessgovt@gmail.com   
      
   Congress Spotlights ‘Serious’ Forced Labor Concerns With Chinese Shopping   
   Sites   
   By Ana Swanson and Claire Fu, June 22, 2023, NY Times   
   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   
   U.S.   
      
   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 U.S. 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 to close 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,” said Rep. Mike Gallagher (R, WI), 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 Rep. Raja Krishnamoorthi (D, IL), a co-author of the report,   
   referring to the Chi-Comm    
   Party.   
      
   Temu, which began operating in the U.S. 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 site sells 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 U.S. daily.   
      
   The shipping method allows retailers to sell their goods to consumers at   
   cheaper prices, since they are not subject to duties, taxes or govt fees that   
   apply to traditional retailers that typically ship overseas goods in bulk.   
      
   De minimis shipping also requires far less info 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 2016-2021, when it reached 720 million.   
      
   At an annualized rate, the shipments reported by Shein and Temu would   
   represent over 30% 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. b   
   ick-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 report this 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 HQ to Singapore. Temu, which is based in Boston, is a subsidiary of PDD   
   Holdings, which moved its    
   headquarters to Ireland from China this year.   
      
   Lawmakers have been questioning their relationship with the Chinese govt, 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 govt 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.    
   govt 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.   
      
   Lab 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.   
      
      
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