US lawmakers reportedly pushing for import ban on PDD's Temu

Pinduoduo (PDD) stock drops following reports that US lawmakers aim to restrict its high-discount e-commerce site Temu with an import ban. Yahoo Finance Live examines the headwinds other China-based online retailers may face.

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Editor's note: This article was written by Luke Carberry Mogan.

Video Transcript

- Well, shares of PDD Holdings turning negative heading into the close, that's after the information reported that US lawmakers are calling for an import ban on all goods sold by Temu. Officials say the Chinese company has not done enough to, quote, "Prevent its suppliers from using forced labor." That's according to the report. PDD Holdings is the parent of China online retailer Pinduoduo, and its overseas focused retailer arm Temu. Is it Temu? I thought in the commercial the Super Bowl they said Temu.


- See that's, you're right. I heard Temu, that's why. Which means I've been saying it wrong for a while.

- I was saying Temu, then I saw the commercial. I, I don't know. I've never shopped on the thing. Anyway, PDD has enjoyed a rapid rise in recent months, outpacing rival Chinese e-commerce site Alibaba, as it focuses on aggressive international expansion. So the latest example here after say a TikTok, that's the other one that springs to my mind, and ByteDance of US officials potentially having a material impact on a Chinese-based company.

- Yeah. I mean, we've talked before about how maybe one of the few, if only issues, on Capitol Hill that Republicans and Democrats seem to agree on is often China. And one issue is the National Security risk they think it poses, and the other is the serious and ongoing issue of how the Chinese Communist Party treats its Muslim minority population. And I think this is another example of what you see there.

And for companies doing business there, Julie, how much line of sight do you ever really have. How much total and complete line of sight do you have into your supply chain in China. Whether it's PDD or another one. Because you really, again, it's a country run by the Chinese Communist Party. It's not a liberal democracy like we have here. Your line of sight there is, I think, always going to be a bit cloudy.

- Right, even for retailers and manufacturers that are based in the US--

- For sure.

- That get goods from China.