Attorneys general from 16 US states have jointly written a letter to the Securities and Exchange Commission (SEC) requesting that it mandate independent verification from fast-fashion retailer Shein to confirm that its products do not involve forced labor in their production. The move highlights growing scrutiny around Shein’s trade, labor, and environmental practices, as well as broader concerns regarding US-China relations.
Shein, a Singapore-based company that predominantly manufactures its garments in China, has come under heightened scrutiny, and the pressure on the company is now expanding beyond Washington. Reports suggest that Shein has been contemplating a public offering in the US.
The attorneys general, primarily representing Republican-led states such as Montana, Virginia, and Utah, have urged the SEC to require foreign-owned companies seeking to be listed on US-based securities exchanges to provide independent certification of compliance with Section 307 of the Tariff Act of 1930. This section bars the import of products manufactured wholly or partially by forced labor.
Last year, a Bloomberg investigation found evidence linking cotton produced in China’s Xinjiang region, known for concerns related to forced labor, to clothing sold by Shein. The attorneys general’s letter emphasizes that Shein’s challenges have now transcended Washington and are expanding into different states, indicating growing skepticism towards the company’s practices.
The attorneys general are advocating for a zero-tolerance approach to foreign companies that seek access to US markets while avoiding compliance with US laws, particularly those aimed at preventing human rights abuses. This move reflects a commitment to upholding the rule of law and safeguarding the US economy.
Governor Greg Gianforte of Montana, in particular, has raised concerns about foreign-owned companies with connections to China, such as social media app TikTok, which was banned in the state earlier this year. In July, Representative Jennifer Wexton introduced a federal bill that aims to amend the Securities Exchange Act of 1934, requiring companies seeking listing in the US to ensure they do not engage in forced labor practices.
