Robert Way
The EU is prepping a proposal to impose import duties on cheap products bought from online platforms outside the region, Bloomberg News reported.
The move would mainly target Chinese firms such as Temu, owned by PDD (PDD), Alibaba’s (BABA) AliExpress, and Shein, the report added citing people with knowledge of the matter.
The plan was first reported by the Financial Times.
The EU currently has a €150 ($161) duty-free limit for online purchases, which is for small gifts or personal packages. However this has enabled a rise in lower-value imports from the foreign online retailers, the report noted.
The plan aims to halt this flow and would apply to all non-EU e-commerce platforms.
It is yet to be seen if there would be general agreement across member states on the issue to take action. But the move does suggest growing protectionism against Chinese companies as the cheaper goods threaten local manufacturers. In July, the EU will unveil provisional tariffs of up to 38% on Chinese electric vehicles, the report noted.
The U.S. also has a similar duty exemption for low-value personal goods, but several bills are pending before Congress which would close off or lower what is called the de minimis threshold.
Shein has grabbed market share from European apparel retailers such as Hennes & Mauritz AB and Inditex’s Zara, while Amazon is thinking of launching its own low-cost online storefront. Amid the inflation in the U.S. and EU, there has been substantial demand for cheap products sold by Temu and Alibaba operated unit, the report added.