Lawmakers Raise Alarm Over TikTok’s Potential to Flood US Market With Slave Labor Goods

The TikTok logo is displayed at a TikTok office in Culver City, California on December 20, 2022. Mario Tama/Getty Images

WASHINGTON—TikTok’s launch of a new shopping platform is causing concern among some U.S. lawmakers because of the prospect of the Chinese-owned video-sharing app flooding the U.S. market with the e-commerce business.

TikTok, owned by the Beijing-based tech giant ByteDance, is reportedly expanding its e-commerce business by introducing a new program in the United States as early as August.

Rather than partnering with U.S. merchants, TikTok will use the digital marketplace to sell goods manufactured in China, such as clothes and household gadgets, according to The Wall Street Journal, which cited unnamed sources.

With the shopping feature, TikTok is eyeing to take on Temu and Shein, two fellow Chinese e-retailers that have gained explosive growth in the United States by directly selling low-cost products made mostly in China.

“TikTok will follow in the path blazed by Shein and Temu. That is, it will flood the U.S. market with slave-made goods, bypassing the Uyghur Forced Labor Prevention Act by keeping shipments below the $800 de minimis threshold for customs inspection,” Sen. Marco Rubio (R-Fla.) told The Epoch Times.

Sen. Marco Rubio (R-Fla.) speaks during a press conference in the U.S. Capitol in Washington on July 11, 2023. Madalina Vasiliu/The Epoch Times

“This will undermine American businesses, because who can compete with slave labor and duty-free entry? Worse, it will make American citizens complicit in the Chinese Communist Party’s (CCP’s) genocide in Xinjiang.”

More than a million Uyghur and other Muslim minorities have been incarcerated in internment camps in China’s far-western Xinjiang region, where they have been subjected to forced sterilization, torture, and forced labor. The United States and other Western democracies have labeled Beijing’s actions a genocide. An independent tribunal in London in December 2021 reached the same conclusion.

In response, President Joe Biden signed the Uyghur Forced Labor Prevention Act into law in 2021, banning products from Xinjiang from being imported into the United States, unless companies could prove their suppliers don’t use forced labor. The law has been in effect since June 2022.

But lawmakers took note of a potential “loophole” in implementing the ban. Under current laws, products under $800 in valuation could enter the United States free of duty. These shipments could face fewer inspections by border officials related to the forced labor ban. Moreover, by avoiding tariffs and import duties, these digital marketplaces could sell products at low prices, offering them advantages over local retailers that buy in bulk.

A worker makes clothes at a garment factory that supplies Shein, a cross-border fast fashion e-commerce company in Guangzhou, in China's southern Guangdong Province, on July 18, 2022. Jade Gao/AFP via Getty Images

The two booming Chinese shopping apps, Shein and Temu, have been accused of taking advantage of the exemption rule, which is referred to as the de minimis provision, and shipping thousands of small packages directly to U.S. customers.

According to a congressional finding released in June, more than 30 percent of imported parcels under the de minimis provision were reported by Shein and Temu last year. Nearly half of such shipments were from China, it added.

In the report, the House Select Committee on the CCP accused Temu of failing to maintain “even the façade of a meaningful compliance program” that blocked products sourced from forced labor in China from being sold on its platform.

Sen. Jeff Merkley (D-Ore.), who is among the leading lawmakers in Congress pushing to clamp down on products made with forced labor in Xinjiang, raised concerns that merchandise sold on TikTok’s new marketplace could bypass the standard import controls.

The “Uyghur community, having been enslaved in an incredible, science fiction, high-track fashion is of concern to anybody who loves freedom in the world and who cares about human rights, and that was a big deal to say the products made with forced labor can’t come to the U.S.,” Mr. Merkley, co-chair of the Congressional-Executive Commission on China, told The Epoch Times.

“So if this bypasses that in any way, that’s a problem.”

Sen. Jeff Merkley (D-Ore.) speaks during a hearing about “Corporate Complicity: Subsidizing the PRC’s Human Rights Violations” in Washington on July 11, 2023. Madalina Vasiliu/The Epoch Times

The company last November quietly introduced the existing in-app shopping feature, TikTok Shop, to allow vendors to sell products by paying a commission on their sales. But for the new marketplace, TikTok will store and ship items and handle transactions, logistics, and customer service, according to The Wall Street Journal.

Additionally, TikTok is testing a new retail function, dubbed Trendy Beat, in the app’s British version. Products offered are shipped from China and sold by a subsidiary of TikTok’s parent company, ByteDance. A spokesperson for TikTok told media outlets they’re not testing the new program in the United States. But a trademark application filed in May for Trendy Beat suggested the social media company may be preparing to do so.

By expanding its e-commerce presence, TikTok is seeking to increase the gross merchandise value to as much as $20 billion from last year’s $4.4 billion, according to the report.

In response to a question from The Epoch Times at a press briefing, State Department spokesman Vedant Patel wouldn’t comment directly on TikTok’s initiative to sell goods made in China but said the Biden administration has moved to ban the Chinese-owned social media app on government devices.

State Department spokesman Vedant Patel speaks with reporters during a press briefing at the Department of State in Washington on July 27, 2023. Madalina Vasiliu/The Epoch Times

“What I can say is from the State Department’s point of view, we’ve been clear—at least as it relates to TikTok—that they are not available or sanctioned to be used on State Department and U.S. government devices,” Mr. Patel said.

Mr. Rubio, calling for Congress to pass the Import Security and Fairness Act that he co-sponsored in June, said it’s time to ban TikTok.

“What matters more: a CCP-owned cellphone app or the economic health and moral security of our nation?” he asked.

The Epoch Times reached out to TikTok for comment but received none by press time.

National Security Concern

The push to ban TikTok, which has more than 113 million U.S. users a month, has been gaining momentum, at a time when threats stemming from the CCP’s global ambitions to challenge the liberal democratic world order are drawing broader concern.

Lawmakers on both sides of the aisle expressed security concerns about the viral app that could hand over American users’ data to the Chinese authorities, given that China’s intelligence law compels “any organization or citizen” to “support, assist, and cooperate” with security and intelligence agencies when asked.

The popular China-owned platform has for years sought to minimize its links with Beijing—links that triggered efforts from the Trump administration to block TikTok from operating in the United States. In a number of public statements, the company has maintained that it stores U.S. user data locally and wouldn’t hand it to Chinese authorities if asked.

As the social media app moves aggressively into e-commerce, its handling of American users’ data has Rep. Gregory Meeks (D-N.Y.) concerned.

It’s important to ensure that “we’re not getting over to China or anyone else our information and access” that “they can play games with,” Mr. Meeks, House Foreign Affairs Committee ranking member, told The Epoch Times.

“We’ve got to protect our records, our identity, and our people,” he said. “I don’t want anything that’s stored in China.”

U.S. Rep. Gregory Meeks (D-N.Y.), then-chairman of the House Foreign Relations Committee, gives remarks at the opening plenary session for the African and Diaspora Young Leaders Forum at the African American History and Culture Museum in Washington, on Dec. 13, 2022. Anna Moneymaker/Getty Images

More than half of U.S. states have banned government-owned devices from using TikTok. Montana Gov. Greg Gianforte signed legislation in May banning the social media app from operating in his state. TikTok is challenging the state-wide ban that is set to take effect on Jan. 1, 2024.

During a Senate Select Committee on Intelligence hearing on March 8, FBI Director Christopher Wray said that TikTok “screams out with national security concerns” and could be used as a tool by the CCP to manipulate the thinking of millions in the United States.

Sen. Marsha Blackburn (R-Tenn.), like Mr. Rubio, called for a complete ban in the United States.

“Not only is the Chinese Communist Party stealing our data using TikTok, but they want to team up together to influence our manufacturing sector. If there was any question that the app is being used as a tool for the CCP to embed in American society, there shouldn’t be now,” she said.

Sen. Marsha Blackburn (R-Tenn.) speaks at a news conference on the Supreme Court at the U.S. Capitol Building in Washington, on July 19, 2023. Anna Moneymaker/Getty Images

“They are a national security risk that should have no place in the U.S. while they are under CCP control.”

Jackson Richman contributed to this report.