Chinese-linked online retailers SHEIN and Temu are facing intensified pressure in the United States as lawmakers and state authorities ramp up calls for investigations into their business practices — spanning alleged intellectual-property theft, forced labour, product safety and data-privacy concerns.
At the federal level, Tom Cotton, a US Senator from Arkansas, has written to the US Department of Justice (DOJ) and the Department of Homeland Security (DHS) urging them to launch a formal investigation into both platforms. In his letter, he flagged widespread concerns that the companies are distributing counterfeit goods and infringing on the intellectual-property rights of American designers and brands. He pointed out that the companies’ business models—once aided by a trade exemption for low-value parcels — have changed: “These companies now stock massive inventories in US warehouses and distribution centres. Their goods are no longer slipping through ports,” he wrote.
At the state level, investigators are zeroing in not just on counterfeit allegations, but also on potential labour abuses and safety breaches. In Texas, the state’s Attorney General Ken Paxton has launched a probe into allegations that SHEIN may be using forced labour, selling unsafe products or hazardous materials, and misrepresenting product-safety and sourcing information.
Meanwhile, in Arizona, the state’s Attorney General Kris Mayes has filed a lawsuit against Temu and its parent company, accusing the retailer of running deceptive business practices, harvesting consumer data without consent — including GPS location and lists of installed apps — and allegedly selling counterfeit and substandard goods. Mayes described the alleged data-harvesting as “possibly the gravest violation” under state consumer-fraud laws.
Prosecutors are concerned about Temu being subject to rules in China that require Chinese corporations to disclose data sought by the government, and that its coding is designed to escape security assessments.
These developments reflect a broader crackdown on low-cost, high-volume online marketplaces. Observers note that both companies have benefited from generous trade provisions that allowed them to ship low-value parcels duty-free; with those exemptions now removed or curtailed, the firms appear more vulnerable to regulatory and legal oversight.
