The European Union is reportedly taking aim at a number of high profile Chinese online retailers with proposed import duties.
The Financial Times reported that Brussels is drawing up plans to impose customs duties on cheap goods bought from Chinese online retailers including Temu, Shein and AliExpress.
The move comes after the European Union and the United States recently imposed stiff tariffs on Chinese EV imports, because of allegedly excessive and unfair subsidies for local EV makers from China’s communist government.
Import duties
Late last month Chinese state media indicated that Beijing wants the EU to cancel its planned import taxes on electric vehicles (EVs) by 4 July, after the sides agreed to negotiations.
China denies unfairly subsidising its EV industry and accuses the EU of protectionism and breaching international trade rules.
But now the Financial Times has reported that Brussels is drawing up plans to impose customs duties on cheap goods bought from Chinese online retailers, in an effort to stem a surge in what the EU claims are substandard items coming from China.
The European Commission will reportedly later this month suggest scrapping a current €150 (£126.94) threshold under which items can be bought duty free, three people briefed on the matter told the Financial Times.
Under current EU regulations, packages purchased online from a non-EU country are not subject to customs duties if their value is under 150 euros.
The main platforms being targeted were China’s online marketplaces Temu and AliExpress and clothing retailer Shein, one official reportedly said.
Importing goods
Last year, 2.3 billion items below the duty-free €150 threshold were imported into the EU, according to the EC.
The FT noted that China benefits from subsidised postage costs, meaning it is cost-effective to send cheap goods by air.
The provisions would apply to any online retailer shipping to EU customers directly from outside the bloc. US-based Amazon typically uses sellers based in Europe, the FT noted.
Another possible measure would be to make it compulsory for large platforms to register for VAT payments online, no matter their value.
Since 2021, packages sent to EU consumers already pay VAT regardless of their value, but they are duty free.
The options will be put forward in preparation for the new commission, which will take office later this year, the FT reported.
Retailer responses
The commission already proposed scrapping the duty threshold last year, but it could now seek to speed up its adoption to counter the surge of cheap imports, one EU official reportedly said.
However, another official cautioned that getting EU countries to agree could be difficult, given that the new regime would increase the workload of already overstretched customs officials.
Temu reportedly said its growth was not dependent on cheap items and that “we are open to and supportive of any policy adjustments made by legislators that align with consumer interests” as long as these policies were fair.
AliExpress reportedly said it was “working with the legislators” to “make sure we were, are and continuously will be in a compliant position in the EU market”.
Shein also said it was “fully supportive” of efforts to reform customs duties.