House China committee targets top clothing brands in forced labor inquiry
A shopper carries a bag of Nike merchandise along the Magnificent Mile shopping district on December 21, 2022 in Chicago, Illinois.
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WASHINGTON — A House committee examining the U.S. government’s economic relationship with China is asking some of the world’s largest clothing companies for information about the use of forced labor during production — a potential violation of U.S. trade law.
Lawmakers asked retailers Temu, Shein, Nike and Adidas North America about the use of materials and labor sourced from the Xinjiang Uyghur Autonomous region of China, according to letters sent to company leaders on Tuesday. Such practices would constitute violations of the 2021 Uyghur Forced Labor Prevention Act, according to the lawmakers.
Congress passed the UFLPA with bipartisan support after the State Department determined China is “committing genocide against Uyghurs and other minority groups in Xinjiang.”
The letters were sent to Rupert Campbell, president of Adidas North America; Qin Sun, president of Temu; Chris Xu, CEO of Shein and John Donahoe, president and CEO of Nike, Inc. They were signed by Reps. Mike Gallagher, R-Wisc., chair of the House Select Committee on the Chinese Communist Party, and Ranking Member Raja Krishnamoorthi, D-Ill.
“Using forced labor has been illegal for almost a hundred years—but despite knowing that their industries are implicated, too many companies look the other way hoping they don’t get caught, rather than cleaning up their supply chains. This is unacceptable,” Gallagher in a statement. “American businesses and companies selling in the American market have a moral and legal obligation to ensure they are not implicating themselves, their customers, or their shareholders in slave labor.”
The inquiries also follow a March hearing of the committee that included an expert assessment finding that U.S. companies finance “state-sponsored forced labor programs in the Uyghur region.”
The lawmakers requested responses to their questions, including the identity of materials suppliers, supply chain policies and audit measures for suppliers, by May 16.
Representatives for the companies did not immediately respond to requests for comment from CNBC.
The latest inquiries follow a separate bipartisan effort earlier this week urging the Securities and Exchange Commission to require Shein to certify it does not use Uyghur labor before the company can expand into the U.S. market. Shein has denied the accusation.
Chinese brands Shein and Temu, which is owned by Chinese parent company PDD Holdings, are also accused of capitalizing on a 90-year-old loophole to avoid tariffs on many goods sold directly to U.S. consumers, the lawmakers said Tuesday.
The lawmakers say Shein and Temu rely heavily on the de minimus provision of Section 321 of the Tariff Act of 1930 to waive import tariffs if the fair retail value of in the country of shipment does not exceed $800.