Sen. Rick Scott (R-Fla.) has called on the Commerce Department to investigate Chinese budget online retailer Temu’s business practices. In a letter dated Aug. 14 to Commerce Secretary Gina Raimondo, Scott expressed concerns about Temu’s rapid growth and its potential impact on 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, owned by Chinese e-commerce giant PDD Holdings, launched in the United States in September 2022. According to research firm Marketplace Pulse, there are over 100,000 China-based sellers operating on Temu.
Scott identified five areas of concern regarding Temu: product safety and quality, labor practices, unfair competition, data privacy, and counterfeit goods. He warned that products sold on Temu may not undergo rigorous safety tests like competitor products from other parts of the world.
“There are concerns that Temu may be a conduit for counterfeit products,” he added.
South Korea’s Yonhap News Agency reported toxic substances being found on women’s accessories sold on three Chinese online platforms including Temu. Reports have also surfaced about unsafe working conditions and labor abuses associated with production for Temu.
In June last year, the House Select Committee on the Chinese Communist Party (CCP) published a report warning consumers about forced labor risks within Temu’s supply chains.
Scott also questioned how Temu can sell products at lower prices than U.S. retailers and suggested it could be due to unfair trade practices or loopholes in import regulations.
In February, Scott and Sen. Sherrod Brown (D-Ohio) sent a letter to President Joe Biden urging an end to the “de minimus” trade rule which benefits foreign companies like Temu by allowing duty-free imports under $800 without thorough customs inspection.
Data security is another concern raised by Scott due to Temu’s Chinese ownership. He emphasized investigating potential risks to American consumers’ data privacy and security given China’s laws that allow access to data collected by Chinese companies for intelligence purposes.
Scott requested that the Commerce Department conduct a comprehensive investigation into Temu while collaborating with relevant agencies such as Consumer Product Safety Commission and Federal Trade Commission. He also asked for a detailed report submitted to Congress outlining their findings along with a meeting with Secretary Raimondo regarding this issue.