US Crackdown on Chinese Goods
The US President Donald Trump has destroyed Temu and Shein’s business model for a duty-free gap and suffocated their flood of cheap Chinese goods to the USA. In 2024, 1.36 billion shipments included the so-called de-minimis rule in the USA, and created worth 800 USD from import duties. This number marks a nine-time increase of 153 million in 2015.
Impact on Temu and Shein
Goods that were bought by Temu and Shein last year, which were completed by 30% of daily US low-value packages last year, are now subject to a 30% tariff or flat fees of up to $50 and the last month of $145% for imports from China. Since the prices for US consumers are more than doubled, the profit margins of these retailers have collapsed. Therefore, Temu and Shein will probably double Europe and take advantage of the European Union’s de-minimis gap in order to maintain their inexpensive model.
Europe Plans to Scrap De Minimis Gap
Although the EU exemption of €150 is lower than the US limit, the exception of Temu and Shein has not slowed explosive growth. In 2024, 4.6 billion low-value packages flooded the EU market – a doubling of 2023 and three times from 2022, 91% date from China. These 12.6 million daily packages are delivered duty-free and European retailers are undermined, which are burdened by higher costs for working chain, supply chain, and compliance.
Delay in Implementing New Rules
Although the European Commission suggested two years ago to scrap the EU de-minimis exemption, the plan is still waiting for the 27 EU member states and the European Parliament. According to the Bloomberg news agency, the ax will fall until 2027 at the earliest. This delay offers these European companies, which are already confronted with violent Chinese competition, little relief, from e-commerce to solar modules and electric vehicles (EVS), which are now exposed to Trump’s US tariffs, which are more to be distracted to Europe and goods.
Chinese Goods Often Fail Security Tests
This influx of cheap goods does not threaten to threaten the profitability and trigger the layoffs of the EU companies, but has much larger alarms over product safety. Agustin Reyna, General Director at Beu, a lobby-based lobby of European consumer organizations, said groups such as his "extensive evidence of" Chinese were collected – from poisonous make-up and clothing up to faulty toys and devices-defined EU security standards.
Need for Extra Tools
"We need extra tools to combat the influx of uncertain products that are entered by small packages in Europe that are often bought on platforms such as Temu," said Reyna. "Consumers are unknowingly endangered her health and security."
VAT a Growing Problem
There are growing evidence for other illegal practices of Chinese sellers, including the suppression of the value of the goods, to avoid sales or VAT (VAT). Depending on the EU state, these are between 20% and 27%. "There are many cases in which importers explain the wrong value for their programs that fall under the threshold and avoid the formalities of customs" said Da Tsenov Academy of Economics in Bulgaria. "That is fraud."
France Plans "Fraud Control" Measures
While the European Commission’s plan to scrap the liberation of 150 euros remains that some EU countries have started the proposal. The French government said last week that it would increase inspections to low estate in the country. Imports are analyzed on product safety, labeling standards, and environmental standards, and Paris will calculate an "administrative fee" for a general "administrative fee" for each package.
Conclusion
The European political decision-makers must contain fraud, ensure compliance with compliance, and promote fair competition without limiting the access of consumers to affordable goods of Chinese retailers.
