In recent weeks, mounting pressure from U.S. political leaders has shone a spotlight on Shein and Temu. Although both companies built their fortunes on ultra-low-cost fashion and rapid fulfilment, critics now argue that their business practices may erode the foundations of intellectual property, undermine smaller designers, and upend fair competition in global retail.
Accusations Escalate: From Cheap Clothes to Potential Crime
At the center of the controversy is a letter sent by U.S. Senator Tom Cotton calling on the Department of Justice and the Department of Homeland Security to open a formal probe into Shein and Temu. He cites widespread allegations of intellectual property theft, counterfeiting, and the sale of misleading or fake goods. The shift in U.S. customs policy this year, ending a long-standing exemption that allowed low-value packages to enter duty-free, has resulted in millions of already-shipped items now sitting in U.S. warehouses. This change, Cotton argues, places those goods under full American legal jurisdiction.
At the state level, Texas’s Attorney General Ken Paxton has begun an investigation of Shein that goes beyond design copying. His inquiry will examine whether the company violated state laws pertaining to labor standards, product safety and transparency, and possibly even data collection and privacy.
Structural Dynamics: Why Copying, Not Innovation, Drives Their Model
Observers note that allegations against Shein and Temu are not just about individual bad actors but point to a systemic advantage these platforms gain by treating design piracy and counterfeiting as a core operational lever. Their supply chains are built around speed and volume: instead of investing substantial time and money in original design and development, they allegedly monitor emerging U.S. fashion trends, replicate them using data-driven processes, and have new versions on sale within days. This ability to rapidly convert trending designs into mass-market items at rock-bottom prices undercuts designers who rely on creativity and IP protection.
Traditional fashion brands often invest heavily in research, design, prototyping, and marketing cycles that can cost hundreds of thousands of dollars before a product ever reaches shelves. For Shein and Temu, that investment is largely bypassed, enabling much lower overhead and retail prices.
Market and Legal Implications: What Is at Stake
If the investigations lead to legal action, the consequences could reshape the global fast-fashion economy. Strong enforcement of intellectual property laws could force these platforms to internalize design and compliance costs, reducing their price advantage and possibly slowing their turnover. For U.S. designers and smaller brands, it could restore a level of competitive fairness and protect creative output from wholesale cloning.
At the same time, the unfolding probes reflect a broader geopolitical shift: IP protection is becoming not only a matter of legal compliance but also a strategic trade lever in U.S.–China economic competition. Companies operating cross-border supply chains may find themselves grappling with far stricter scrutiny as regulators increasingly view design theft and counterfeiting as national economic and security risks.
For consumers, stricter enforcement could mean fewer ultra-cheap knockoffs flooding online marketplaces. Prices may rise modestly, and product variety, especially of fast-turnover trend items, could decline. Yet supporters argue this might come with increased transparency, safety, and ethical sourcing.
What’s Next
The coming months should reveal how aggressively U.S. authorities will pursue legal actions against Shein and Temu. Will these probes remain symbolic pressure tactics or lead to concrete sanctions, fines, or structural changes in how ultra-fast-fashion platforms operate? Overseeing agencies such as the DOJ and DHS may set new precedents that ripple through global e-commerce. For stakeholders across the fashion supply chain, from independent designers to shoppers, the outcome could redefine the economics of fast fashion.
