Temu, Shein hit with class actions demanding tariff refunds

By Jonathan Bilyk | Legal Newsline
The Center Square

Online Chinese discount marketplace giants Temu and Shein have each been hit with nationwide class action lawsuits, demanding they repay customers for “windfall profits” they allegedly kept when they increased their prices to account for the price of tariffs imposed by President Donald Trump that were later found to be unconstitutional.

In March, attorneys from the firm of McGuire Law filed the class actions in Cook County Circuit Court against the companies.

Both of the lawsuits were filed on behalf of named plaintiff Lola Russell, identified only as a resident of Cook County who purchased items online through both Temu and Shein during the 12 months from February 2025 to February 2026.

Like lawsuits against other online sellers and retailers, the lawsuits accuse Temu and Shein of wrongly making their customers pay substantially more for items to account for tariffs imposed on the items Temu and Shein imported to the U.S. from China.

Temu and Shein are both online marketplaces, ostensibly competing against one another, that purport to offer Americans the chance to purchase goods made in China direct from manufacturers, rather than through a third-party retailer.

The companies claim this arrangement allows the companies the ability to offer sometimes steep apparent discounts on the Chinese-made products listed on their sites.

However, in early 2025 after President Donald Trump began his second term, those prices increased sharply in response to Trump’s imposition of high tariffs on imports from China, citing authority to unilaterally impose such tariffs at whim under the federal International Emergency Economics Act.

According to the complaints, Temu and Shein both increased prices by as much as 377% in some cases, assuring customers with online messages that the price of the new tariffs were included in the new prices of the imported Chinese goods.

Trump’s tariffs and his assertions of power were challenged in court by retailers and others, who argued the president had exceeded his powers in imposing the tariffs without authorization from Congress.

The U.S. Supreme Court ruled Trump had, indeed, exceeded his powers under that law and declared the associated tariffs illegal.

In the months since, companies have filed petitions seeking refunds on those illegal tariffs.

The companies themselves, however, have also been hit with class actions and other lawsuits on behalf of consumers, who assert the companies should not now be allowed to simply pocket their “windfall” by keeping the overcharges they assured customers were needed to pay the tariffs.

In the complaints against Temu and Shein, the plaintiffs assert the companies could be due refunds worth hundreds of millions of dollars.

But they say the companies should be compelled by the courts to repay the alleged overcharge “windfall,” even if they don’t ultimately receive full refunds from the U.S. treasury.

The complaints note that many companies seeking refunds have already benefited from participating in “a robust secondary market in which distressed investors and hedge funds” offer cash in exchange for a cut of the IEEPA tariff refund claims.

“Even if (Temu or Shein) does not receive a refund, it is still unfair, oppressive, unscrupulous, and causes substantial injury to consumers to charge consumers the cost of unconstitutional, unlawful IEEPA tariffs that provide no benefit to Plaintiff or other consumers in any way,” the nearly identical complaints claim.

The lawsuits seek to make Temu and Shein pay for allegedly violating the Illinois Consumer Fraud Act and under counts of unjust enrichment.

The plaintiffs are seeking to expand the actions to include perhaps millions of Temu and Shein customers in Illinois and throughout the U.S.

The plaintiffs are represented by attorneys Joseph M. Dunklin and Myles McGuire, of McGuire Law P.C., of Chicago.