US Senator calls for investigation into Shein, Temu over IP theft

US Senator Tom Cotton has urged the Department of Justice and Department of Homeland Security to investigate online retailers Shein and Temu for alleged intellectual property theft and counterfeiting.

Shein ships most of its products from China, and Temu is owned by PDD Holdings.

Cotton said in a letter that recent changes to US trade exemptions have led both companies to store large inventories in US warehouses, placing them under American jurisdiction.

Shein has previously said it requires suppliers to certify their products do not infringe on intellectual property, and that it enforces compliance.

Texas Attorney General Ken Paxton said he is investigating whether Shein violated state law on labor practices and unsafe products.

🔗 Source: Reuters

🧠 Food for thought

Implications, context, and why it matters.

De minimis suspension reshapes small‑package imports; scrutiny predates the change

A July 30 2025 Executive Order suspended de minimis treatment under 19 U.S.C. § 1321(a)(2)(C) effective August 29 2025 1. De minimis covers low‑value shipments that previously entered duty‑free at $800 or less 1.
From August 29 2025 importers or customs brokers (filers) must file in the Automated Commercial Environment (ACE) and pay duties, taxes, and fees. International postal shipments use a carrier duty collection process 1.
In FY (fiscal year) 2024 U.S. Customs and Border Protection (CBP) processed over 1.3 billion de minimis shipments. Handbags and wallets led Intellectual Property Rights (IPR) seizures by item count 2.
U.S. Customs and Border Protection (CBP) continues to target e‑commerce parcels and seize counterfeit goods at ports of entry. The changes do not alter CBP port‑of‑entry enforcement powers 3.

Compliance tech and testing services can focus on apparel and accessories with high seizure activity

Testing labs and certification services can target jewelry and watches. Seized goods in these lines exceeded $3 billion in manufacturer’s suggested retail price (MSRP), about 57% of total value in FY 2023 2.
Import rules are expected to apply regardless of value, per JD Supra 4. That includes country‑of‑origin marking, quotas, and antidumping/countervailing duties (extra tariffs on goods sold below fair value or benefiting from foreign subsidies). FDA and forced labor requirements also apply 4.