Sen. Rick Scott (R-Fla.) is calling on the Commerce Department to open an investigation into the business practices of Chinese budget online retailer Temu.
In a letter dated Aug. 14 to Commerce Secretary Gina Raimondo, Scott warned that the fast-growing Temu represents “a new challenge” to efforts to ensure fair trade practices in the United States.
“To protect our nation’s economic interests and the well-being of our citizens, I believe it is imperative that we address this issue promptly,” Scott wrote.
Temu’s platform, which began in the United States in September 2022, is owned by Chinese e-commerce giant PDD Holdings, which also operates the Chinese e-commerce platform Pinduoduo. In January, the research firm Marketplace Pulse estimated that more than 100,000 China-based sellers were operating on Temu.
Scott identified five areas of concern surrounding Temu—product safety and quality, labor practices, unfair competition, data privacy, and counterfeit goods—as reasons why the Commerce Department must take action against the shopping platform.
The Florida senator warned that products sold on Temu “are not subject to the rigorous safety tests and inspections that other competitor products made elsewhere around the world undergo.”
“There are concerns that Temu may be a conduit for counterfeit products,” he added.
South Korea’s Yonhap News Agency reported on Aug. 14 that toxic substances were found on women’s accessories, such as hats and sandals, being sold on three Chinese online platforms, including Temu, citing the South Korean city government of Seoul.
“There are reports of unsafe working conditions, labor abuses, and human rights violations associated with [the] production of products for Temu,” Scott wrote. “We need to ensure that the products sold on Temu are not manufactured using forced labor or other unethical practices that violate international labor standards.”
In June last year, the House Select Committee on the Chinese Communist Party (CCP) published a report warning consumers that “there is an extremely high risk that Temu’s supply chains are contaminated with forced labor.”
“Temu does not have any system to ensure compliance with the Uyghur Forced Labor Prevention Act (UFLPA),” the report reads.
The law bans imports from China’s far-western region of Xinjiang—where the Chinese regime has been accused of committing genocide against Uyghurs—unless companies can prove products weren’t produced with forced labor.
Scott also questioned Temu’s ability to sell products at lower prices than U.S. retailers, suggesting that it could result from “unfair trade practices or the exploitation of loopholes in our import regulations.”
In February, Scott and Sen. Sherrod Brown (D-Ohio) sent a letter to President Joe Biden, asking his administration to end the “de minimus” trade rule because it’s a loophole that “unfairly benefits foreign companies and overseas e-commerce platforms such as Temu.” Under the rule, imports under $800 in valuation can enter the United States without paying duties and taxes and with little or no customs inspection.
“De minimis shipments, now numbering 3 million a day, are at an elevated risk of violating UFLPA, containing counterfeit goods, exacerbating the fentanyl crisis, or posing a serious health danger to consumers,” the two senators wrote in their letter.
Scott pointed out in his Aug. 14 letter that data security should be another concern.
“Given Temu’s Chinese ownership, we must investigate potential risks to American consumers’ data privacy and security,” Scott wrote. “Concerns regarding exploitation of Temu application users lead U.S.-based companies to announce warnings and ‘how-to’ guides on removing the Temu application from its application purchasing platform and user devices.”
In China, there are different laws, including the National Intelligence Law, that can compel Chinese companies to hand over data collected within China and elsewhere to Beijing’s intelligence agencies.
Scott asked the Commerce Department to “launch a comprehensive investigation” into Temu, work with the Consumer Product Safety Commission and the Federal Trade Commission to assess potential risks, evaluate the need for new regulations, and submit a detailed report to Congress on its findings.
The Florida senator also requested a meeting with Raimondo to discuss the issue.
The Commerce Department and Temu officials didn’t respond by publication time to a request by The Epoch Times for comment.
