Lenovo wireless earbuds, for example, can be bought for as little as $3 on Temu but go for over $10 on Amazon. The lower Temu price is only unlocked through coupons acquired by promoting the app to social media connections, leading to Temu’s viral spread.
Temu boasts over 10 million downloads in the United States and leads in downloads for all categories of apps since November. The app sells mostly unbranded products made in China.
One may not think of an e-commerce app like Amazon or Temu as having national security implications. Many Americans just want the cheapest product that does the job, from cat toys to potato mashers. Something from China is fine by them.
But these products increase the dependence of American consumers on China, increase tax revenues for Beijing, and make it more difficult to pressure the Chinese Communist Party (CCP) on issues ranging from its military threats against neighbors to fair trade and human rights.
Chinese electronics like mobile phones and consumer drones could be used to spy on Americans, or harvest their data for use by the regime.
While cat toys via Temu may seem harmless, they are getting Americans accustomed to buying directly from China rather than through Amazon and other U.S. vendors (who already get much of their stock from China, and refuse to label it as such).
As should be clear from the dumping of Lenovo earbuds on the U.S. market, Temu can promote viral marketing that undercuts competitors with below-market-cost products. It can thus selectively target American manufacturers, drive them out of business with low-priced products, and then raise prices to monopolistic levels, or leverage supply for political purposes. Beijing has used that playbook before.
Temu is likely attempting to replace Amazon at this moment. So Americans should be vigilant about the products that America’s top adversary is trying to sell and the long-term implications of saving a few dollars on a pair of earbuds.
Some in the Biden administration are pushing for TikTok’s forced sale to a U.S. entity to ensure it cannot influence or spy on Americans. The leaders in that effort are those in the Pentagon and Justice Department, who best understand the national security threat of the CCP due to their knowledge of classified data.
That sentiment applies as much to Temu as it does to TikTok. The latter is owned by ByteDance, based in Beijing, and the former is owned by Pinduoduo, based in Shanghai.
As usual, the U.S. Treasury Department is the one dragging its feet when it comes to protecting America’s economy, data, and political integrity from espionage, theft, and influence operations directed by Beijing. That was the dynamic during the Trump administration, just as it is under President Joe Biden.
Treasury is highly influenced by Wall Street, which is influenced by Beijing, the over $600 billion in annual U.S. trade with China, and the $2.3 trillion in U.S. institutional investment there.
Every one of those dollars is a hostage that the CCP tries to use against us. But since China exports more to the United States than we do to China, we are on balance with the customer. We, therefore, have more commercial leverage.
But, thus far, the United States has failed to use it effectively because of our knee-jerk support for free trade. Our corporate elites, and their spokespeople in Washington and academia, tend to support such trade even when it gives away America’s most powerful tool, control of our markets, and empowers the world’s most dangerous threat to democracy.
At least the Trump administration attempted to ban TikTok after a forced sale failed. Then President Joe Biden rescinded the ban, saying it was unenforceable. He promised another comprehensive solution, but now, after two years, he has still not delivered.
Congress and Republican state governors are taking up the slack by trying to pass laws against TikTok’s use on government devices. That language is included in last week’s omnibus spending bill passed by the Senate and House. But they have not gone nearly far enough. Based on national security rationales, a national and international solution is required for maximum protection.
The forced sale of TikTok could cost billions of dollars because we failed to nip the app in the bud years ago. Now Temu is budding, and we should nip it before buying it out becomes 10 times more costly, in both monetary and political terms.
Already with TikTok, banning the app would be highly unpopular with its 100 million American users, many of whom are voters. Businesses increasingly use the app to target advertising to profitable youth demographics.
Decoupling from those revenue streams will be hard now that it was allowed to take root. We should not wait to be in the same unenviable position relative to Temu.
We should ban both Temu and TikTok, and demand that the rest of the world do so as well. Amazon and other e-commerce companies should be required to gradually divert their supply chains from China and Russia or, at the very least, label countries of origin. All of our freedoms and sovereignties depend on making these strategic choices in favor of transparency and ethics.
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