Texas AG Opens Investigation Into Shein for Labor, Product Violations

Texas Attorney General Ken Paxton announced on Dec. 1 that his office had opened an investigation into fast-fashion retailer Shein for potential labor violations in the state and for selling unsafe products.

According to Paxton, the investigation centers on whether Shein U.S. Services LLC and its affiliates violated state laws by using hazardous or toxic chemicals in its supply chain and manufacturing processes and whether the global online fashion retailer misled consumers about product safety and materials sourcing.

“Safe, non-toxic material and products are another key ingredient to the Make America Healthy Again movement,” Paxton said in a statement. “Any company that cuts corners on labor standards or product safety, especially those operating in foreign nations like China, will be held accountable.

“Texans deserve to know that the companies they buy from are ethical, safe, transparent, and not exploiting workers or selling harmful products. I will not allow cheap, dangerous, foreign goods to flood America and jeopardize our health.”

A SHEIN spokesperson said in a statement to The Epoch Times that the company takes the Texas Attorney General’s concerns seriously and is fully committed to cooperating.

“Our mission—to provide affordable, fashionable products to customers around the world —is underpinned by a dedication to safety, compliance, and respect for human rights,” the spokesperson said.

“We welcome constructive engagement with Attorney General Paxton.”

Shein was founded in 2008 in Nanjing, China, by Chris Xu. The company relocated its headquarters to Singapore in 2022, although much of its operations remain in Guangdong Province, China.

Shein operates in more than 160 countries and has offices in Los Angeles, Washington, Dublin, São Paulo, Paris, London, Singapore, and Guangzhou, China.

Shein pursued an initial public offering on the New York Stock Exchange throughout the early 2020s, but it abandoned the plan in 2024 amid regulatory and political pressure—including a letter from now-Secretary of State Marco Rubio to the U.S. Securities and Exchange Commission urging regulators to block the IPO unless Shein provided additional disclosures about its ties to China and related risks.

“SHEIN’s use of slave labor and abuse of U.S. trade law forced the Chinese company to abandon plans to list on a U.S. stock exchange,” Rubio, a U.S. senator at the time, posted on X in June 2024.

According to the U.S.-China Economic and Security Review Commission (USCC), Shein’s business model and practices raise a number of concerns, including regarding exploiting trade loopholes, issues with product sourcing, manufacturing and product safety, use of forced labor, and intellectual property copyright violations.

Shein and similar overseas online retailers such as Zara and Temu sell clothing directly to U.S. consumers through their apps. Shein’s U.S. market share of the fast-fashion industry has surged from 18 percent in 2020 to 50 percent in 2022, the USCC noted.

The USCC claims that Shein tracks customer usage data across multiple apps and uses artificial intelligence algorithms to determine emerging fashion trends and quickly bring them to market. In 2022, Shein’s parent company, Zoetop, was fined $1.9 million for mishandling data in a 2018 cyberattack that exposed credit card and personal information for 39 million users.

Shein had long avoided U.S. import fees by making shipments below $800 in value, which sidesteps import duties. According to the Department of Homeland Security (DHS), the number of de minimis shipments, which used to be exempt from duties, to the United States increased from 134 million in 2015 to 1.36 billion in 2024. In late August, President Donald Trump suspended the de minimis tariff exemption for all countries.

Central to issues with Shein’s labor practices is the use of cotton sourced from Xinjiang, which violates the Uyghur Forced Labor Prevention Act. Other issues include clothing and accessories that contain unsafe levels of lead, as well as more than 50 cases of patent infringement.

Reuters contributed to this report.