Temu and Shein could face EU crackdown on cheap imports

The news: Temu, Shein, AliExpress, and other Chinese ecommerce platforms could soon be subject to additional fees in the EU, the Financial Times reported, as regulators try to stem the flood of packages making their way into the bloc.

EU officials are considering a range of measures, including:

• Imposing a tax on ecommerce platforms’ revenues
• Implementing administrative handling fees per item
• Doing away with duty-free imports entirely

How we got here: Regulators have a number of concerns about the platforms’ business practices.

• They’re worried about Chinese retailers undercutting local businesses that can’t compete on prices or selection.
• Product safety is also a concern: Authorities flagged a growing number of counterfeit or unsafe products entering Europe.
• They also want to cut down on the number of packages below the de minimus threshold making their way to customers: Roughly 4 billion packages below the duty-free limit will be sent to the EU this year, nearly three times the number sent in 2022.

Will it happen? All three measures would make it harder for Shein, Temu, and their ilk to operate in Europe, but each comes with its own set of complications.

• Getting rid of duty-free limits would curb Chinese ecommerce platforms’ price advantages—but it would also significantly increase the burden on already overworked customs officials.
• The EU would also likely have to go through lengthy negotiations with the WTO to introduce additional fees or taxes on ecommerce platforms. It would likely run into fierce resistance from China, which is already unhappy with the EU for imposing tariffs on EV imports.

Still, it’s likely that the EU will adopt stricter measures against the likes of Temu, Shein, and AliExpress, and the rest—a move that could be imitated by other governments trying to protect local retailers.

Go further: Read our report on Temu, TikTok, and China’s Ecommerce Players in Western Europe.

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