Some fast-fashion brands making the rounds on Instagram and Facebook have a secret ingredient: lead.
Chinese retailers selling “affordable” clothing, such as Shein, are flooding the U.S. market with sparkly dresses, statement jewelry and other trendy items, but reports link these products to harmful exposure.
Government regulatory agencies have been allowing this market to churn for years. Experts say the brands exploit U.S. trade loopholes to avoid oversight and evade tariffs while targeting vulnerable Generation Z consumers.
In a study of fast fashion, researchers for the German consumer magazine Okotest found large amounts of lead, antimony and cadmium in clothing. These substances are linked to cancer and reproductive harm.
The French daily Le Monde reported that the environmental health team in Seoul, South Korea, discovered toxic chemicals such as formaldehyde and phthalates in Shein and Temu products, some exceeding legal limits by hundreds of times.
“Phthalate-based plasticizers affect reproductive functions such as sperm count reduction and can cause infertility,” said an official from the health team.
These chemicals, often found in cheaply manufactured products for children, have raised concerns globally, yet American consumers remain largely unaware of the dangers.
In a statement to The Washington Times, Shein said suppliers must meet strict global standards and work with top international agencies to conduct regular safety tests, including more than 400,000 chemical tests last year. The company said it prioritizes customer safety by investing more than $60 million in strengthening its global compliance programs and partnering with top testing agencies.
In response to testing agencies’ findings, the company said it is proactively withdrawing affected products while investigating further.
Shein’s game-changing business model moves fast fashion at warp speed. Known for “real-time fashion,” the Chinese e-commerce giant leverages its in-house design teams and cutting-edge data analysis to spot trends and design and manufacture products faster than its competitors, according to data from Daxue Consulting, a market research and strategy firm focusing on the Chinese market.
Other brands may take weeks to launch a collection, but Shein churns out 500 to 2,000 new items daily, Daxue reported this year. In 2020, it released 150,000 fresh styles.
Gen Z shoppers, 55% of whom prioritize price above all else, are drawn to Shein.
Bargain-basement prices aren’t inhibiting Shein’s or Temu’s profits. Shein’s revenue for 2022 was $22.7 billion, a nearly $7 billion increase from 2021.
Joel Thayer, president of the Digital Progress Institute, said Temu’s sales are even higher — higher than the company is willing to report.
“I mean, I think Temu said they’re about $15 billion in revenue. And then they had, they actually had a leak of their emails. It’s actually closer to $42 billion,” Mr. Thayer said. “They’re not honest with the incomes that they’re getting.”
He said consumers would be mistaken to think the e-commerce giants are good at marketing and selling.
“These companies aren’t just cheap knockoff factories. They’re tightly connected to the Chinese government, designed to advance the state’s economic goals,” Mr. Thayer told The Washington Times.
Temu has not responded to requests for comment for this report.
With widespread advertising on American websites, apps and social media platforms, Chinese brands are nearly unavoidable for targeted shoppers. Shein also leverages a vast network of influencers to generate buzz.
Gen Z discovers fashion brands primarily through social media and targeted ads, and nearly half of Shein’s followers are younger than 35. Daxue said it is the go-to brand for young, budget-conscious consumers.
How have these brands been able to infiltrate the U.S. market so rapidly? Josh Levine, director of technology policy at the Foundation for American Innovation, said much of it boils down to the de minimis exemption. This obscure trade loophole exempts imports valued at less than $800 from tariffs and inspections.
Giants such as Shein and Temu have exploited the de minimis exemption, initially meant for small personal imports, to dodge U.S. regulations, officials and analysts say.
“Since, I think, 2017 or 2018, we’ve seen a massive uptick in the number of products that are coming in through the de minimis exemption, specifically from China. I believe it’s 63% right now … and that is largely being driven, as we can see, through Shein and Temu,” Mr. Levine said.
Under the Uyghur Forced Labor Prevention Act, which President Biden signed into law in 2021, all goods partly or wholly made in Xinjiang, China, are assumed to be tied to forced labor camps and disallowed from entry.
China has detained up to 1 million Uyghurs in these camps since 2017 and forced them into labor under brutal conditions, Bloomberg has reported. Laboratory tests conducted for Bloomberg News in 2022 confirmed that Shein uses cotton from China’s Xinjiang region.
Shein denies wrongdoing. The company told The Times it has “a zero-tolerance policy for forced labor.”
“Visibility across our entire supply chain is of the highest importance to us, and we are wholly committed to respecting human rights,” a spokesperson said. “As of November 2023, only 1.7% of our cotton tested positive for unapproved cotton.”
Luke Hogg, director of policy and outreach at the Foundation for American Innovation, works with Mr. Levine on Chinese trade policy recommendations. He pointed out that even 1.7% of unapproved cotton is a flagrant refusal to respect U.S. law. Mr. Hogg told The Times that these abuses are systemic.
“Shein and Temu’s supply chains are infected with forced labor. The UFLPA of 2021 established a presumption that any goods made in Xinjiang are produced through slave labor, but enforcement has been slow,” Mr. Hogg said.
After moving its headquarters from Nanjing, Shein has been trying to discard its Chinese image and touting its relatively fresh status as a Singapore-based company.
Despite U.S. bans on cotton from the region, Shein circumvents scrutiny by shipping individual orders below that $800 threshold, allowing its products to enter the U.S. market without customs inspections.
“Chinese companies are exploiting this loophole to avoid tariffs and ship hundreds of millions of illicit products into our country,” Sen. Marco Rubio, Florida Republican, said in a written statement to The Times. “It’s dangerous, and proposed reforms by the Biden-Harris Administration do nothing to address it.”
Last month, the White House announced plans to crack down on Chinese companies such as Shein and Temu. The Biden administration urged Congress to remove textiles and other products from the de minimis exemption to protect U.S. consumers and businesses from unfair competition.
Regulations also will target tariff-evading shipments and enforce stricter safety measures, the White House said.
Speaking on background with The Times, a Senate aide said shutting down de minimis isn’t likely given how many other companies and consumers depend on the business exception.
Meanwhile, Shein denies any foul play.
“Shein has hired up a vast array of lobbyists, and they’re sort of trying to build a coalition against changes to minimus … and there are other people who I think would just prefer … a complete shutdown of trade with some of these items,” the aide said. “But, I mean, even if one were to sympathize with that, it’s just unlikely to happen.”
While trade loopholes help Shein and Temu sidestep import regulations, a sophisticated digital marketing strategy that is particularly potent with the Gen-Z online set fuels the companies’ dominance in the U.S. market.
An issue brief from the U.S.-China Economic and Security Review Commission revealed that Shein’s success is rooted in using data to identify and predict consumer behavior.
Shein leverages user search history and social media activity to anticipate emerging fashion trends faster than its competitors, giving it a marked edge in a market increasingly driven by rapid shifts in online culture.
“These companies use digital tools to understand their customers better than almost anyone,” Mr. Thayer said. “It’s a data play. They’re collecting personal data, analyzing patterns, and using artificial intelligence to tailor their offerings to consumers’ tastes almost instantly.”
After mastering the art of fast fashion, Shein and Temu promote their products on social media platforms such as TikTok and Instagram, often through partnerships with influencers.
TikTok and Instagram feature “haul” videos of influencers trying on Shein and Temu clothing, driving millions of views and sparking viral trends. This fuels more demand for cheap, quickly produced products.
The #Shein tag on TikTok has accumulated more than 3.3 billion views, and the company has 250 million followers across social media platforms, the USCC brief said. The brief shows that Temu purchased nearly 9,000 ads on Meta platforms in January 2023 alone.
Shein’s rapid growth in the digital space has raised concerns. The USCC said Shein collects vast amounts of personal data. The New York state attorney general fined Shein’s parent company $1.9 million for mishandling sensitive consumer information after a 2018 data breach exposed the records of 39 million accounts.
Shein told The Times that the company collects only “the minimum amount of data needed to fulfill orders” and has implemented “robust data security policies.”
Critics argue that Shein’s data collection practices sell more clothes and are part of a broader strategy to integrate with the Chinese government’s economic ambitions.
Sen. Tammy Baldwin, Wisconsin Democrat, expressed frustrations in a statement to The Times.
“Right now, Chinese companies are exploiting a trade loophole to import goods into the U.S. with no oversight — letting them bring in cheap, counterfeit goods that undercut American manufacturers and traffic drugs into our communities,” Ms. Baldwin said.
Some American consumers, particularly those with lower incomes, disagree with the push for more regulation. Scott Lincicome, vice president of general economics at the Cato Institute, said the problem isn’t the de minimis exemption but Trump-era U.S. tariffs.
“De minimis isn’t just about China. The Trump tariffs opened Pandora’s box, forcing companies to find ways around them,” Mr. Lincicome said. “Yes, Shein and Temu have figured out how to exploit it, but they’re not alone. The de minimis exemption used to be about China; now it’s about everywhere.”
Despite its longtime use of the exception, Shein said it officially supports de minimis reform.
Mr. Lincicome said this kind of government interference disproportionately harms low-income Americans who rely on affordable imports. “If we eliminate the de minimis exemption and slap tariffs on all imports, we’re effectively imposing a new regressive tax on poor Americans. These low-cost goods save American consumers billions of dollars each year,” he added.
Instead of hiring more customs agents or enforcing stricter regulations, which would increase taxpayer costs, Mr. Lincicome suggests reducing tariffs on low-value items to encourage bulk imports.
“Policing T-shirts is a waste of resources,” he said. “We should be focusing on bigger issues like fentanyl, not rayon party dresses.”
The Senate aide said it’s all part and parcel of the same question: “It’s about everything that can sort of move through freely without the scrutiny because they’re all using the threshold.”
Mr. Levine and Mr. Hogg said eliminating the de minimis exception would be “throwing the baby out with the bathwater.”
In a recent report published in foreign policy magazine The National Interest, Mr. Levine and Mr. Hogg said the Biden-Harris administration should focus on beefing up the Uyghur Forced Labor Prevention Act “by increasing inspections and audits of companies with ties to Xinjiang, particularly those in the fast fashion industry.”
“By ramping up targeted enforcement efforts, the U.S. can more effectively block products made with forced labor from entering the market without resorting to broad measures that affect legitimate trade,” they said.
Closing the de minimis loophole has bipartisan support, but the debate on how to proceed continues. While Ms. Baldwin and Mr. Rubio push for stricter controls on Chinese imports, the political landscape is fraught with challenges of diplomacy and enterprise.
Mr. Hogg said something has to give.
“We don’t want to pass those costs on to consumers unless there’s a reason to do so,” Mr. Hogg said. “And in this case, if it’s being used with [health hazards] and forced labor, I think there certainly is.”
• Emma Ayers can be reached at eayers@washingtontimes.com.
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