Fast-fashion behemoths Shein and Temu are facing escalating scrutiny in the United States, as senior political figures initiate investigations into allegations spanning forced labor, intellectual property theft, and the sale of counterfeit goods. This surge in regulatory attention, mirroring actions taken in Europe, targets practices related to their supply chains, product safety, and competitive fairness, prompting compliance challenges for the China-linked e-commerce platforms.
The legal spotlight intensified when Texas Attorney General Ken Paxton announced a state-level probe into Shein. This investigation aims to determine whether the company’s operations violate Texas statutes, specifically focusing on claims of deceptive marketing, hazardous material usage in products, and questionable ethical sourcing practices, including the potential employment of forced labor. Paxton publicly stated his resolve to prevent the entry of “cheap, dangerous, foreign goods” that could compromise public health.
Simultaneously, at the federal level, Senator Tom Cotton (R-Ark.) called for a comprehensive, nationwide inquiry into both Shein and Temu. In a letter addressed to U.S. Attorney General Pam Bondi, Cotton accused the platforms of enabling widespread intellectual property (IP) infringement, which he asserts damages American companies and designers.
Regulatory Framework Shifts Enable Scrutiny
Cotton argued that recent modifications to U.S. customs regulations provide federal agencies with the necessary authority to take tougher action. Specifically, the August repeal of the long-standing de minimis exemption—which allowed low-value imports to enter the U.S. free of duties and extensive inspection—now brings a greater volume of low-cost shipments under stricter departmental oversight. Cotton suggested this new framework offers the Departments of Justice and Homeland Security a strategic opportunity to enforce compliance aggressively.
Designers and small U.S. brands have repeatedly accused Shein of rapidly replicating original designs and selling nearly identical items at heavily discounted prices. Furthermore, Senator Cotton cited a U.S. inquiry that indicated a significant portion of merchandise purchased from both Shein and Temu might be counterfeit. He alleged that Temu acts as a host for sophisticated, deceptive counterfeits.
Corporate Responses and Global Headwinds
Shein, which maintains its headquarters in Singapore but relies heavily on Chinese sourcing, confirmed it takes these business practice concerns seriously and vowed cooperation with the Texas investigation. However, the company has not yet issued a direct response to the call for a federal probe. Temu has generally refrained from public comment on these specific U.S. governmental inquiries.
Beyond the U.S., both companies are navigating increasing international regulatory headwinds. Shein continues to face significant criticism regarding the environmental impact of its ultra-fast fashion model and its supply chain working conditions. In Europe, the company has been pressured by the European Union to cease the third-party sale of dangerous items, such as childlike sex dolls and weapons, following alerts from French authorities. Separately, Temu is under investigation in France concerning the distribution of content harmful to minors.
The accumulating legal and regulatory actions globally are compelling both Shein and Temu to address fundamental aspects of their business models, ranging from product governance and supply chain transparency to marketplace practices and data-collection compliance. These pressures suggest a significant restructuring of operational and ethical controls may be necessary for both entities to maintain market accessibility in the West.