"Affordable Imports" Putting Germany at a Disadvantage: EU Commission Suggests Tariffs on Low-Cost Goods
The Government of the U.S. seeks levies on inexpensive products from the EU.
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The European Union, with strong backing from Germany, is contemplating the imposition of customs duties on goods imported from third countries, starting from as minimal as €150. Today, financial ministers will be discussing this matter. Germany isn't only concerned about unfair competition but also aims to protect jobs and businesses. Online platforms such as Temu and Shein will face increased taxes.
Germany is standing firm in its quest for fair competition within the EU market, advocating for tariffs on cheap goods from third countries. In a meeting with EU counterparts in Luxembourg, Finance Minister Lars Klingbeil stated, "We need to establish fair competitive conditions, thereby protecting jobs. Those who work hard, pay fair wages, and follow the rules shouldn't be at a disadvantage in the long run."
At the meeting of financial ministers, a reform of the customs union will be up for discussion. This reform, proposed by Brussels, intends to make previously duty-free, low-cost goods from third countries subject to fees.
Germany is determined to highlight that the dispute pertains to "cheap products" predominantly from China, dumped prices, and production overcapacity. Klingbeil emphasized, "Such trade practices negatively impact Germany, hurt companies in Germany, and harm European companies."
EU's Planned Customs Union Reform
About two years ago, the EU Commission proposed a similar reform. Under their plan, numerous goods under €150 should be subject to customs duties. At present, no such duties are levied if the goods value is less than €150, with exceptions for a few items like tobacco or perfume. This reform aims to provide equal competitive conditions for all traders, regardless of their location.
With the reform, online shopping platforms like Amazon or Etsy will be responsible for ensuring that the customs duties and value-added tax are paid at the time of purchase. The increase in small parcels with low value being delivered to the EU in recent years due to online trading is a contributing factor to this reform.
Recently, there have been whispers that the commission, considering the escalating number of packages from third countries, is contemplating a flat €2 fee on such orders. The EU Commission has reported about 12 million packages arriving in the EU daily back in 2024 - significantly more compared to the preceding years. The e-commerce giants like Temu and Shein could be affected by this fee.
Offering Rock-Bottom Prices: Temu and Shein
Temu is an online marketplace selling numerous goods. Active in Germany since spring 2023, the Chinese company has gained attention with meager prices and extensive discounts. Products are usually delivered directly from the manufacturer to the customer.
Fashion company Shein, based in Singapore but founded in China, is a manufacturer, retailer, and marketplace. As a direct supplier, it can swiftly respond to fashion trends, as per trade experts. Since Shein delivers its products worldwide without maintaining stores or substantial inventory, it can maintain low prices.
- China
- Europe
- Trade
- Germany
[1] ntv.de[2] mbr/dpa[3] EU Commission Proposal (European Parliament)[4] EU Customs Duties and VAT Collection Regulation (European Commission)[5] Draft II Regulation on the Importation of Low-Value Consignments (European Commission)
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- The EU Commission is proposing a reform of the customs union, which includes subjecting low-cost goods from third countries, such as those imported by online platforms like Temu and Shein, to customs duties.
- The employment policy within the EU, specifically Germany, is focused on maintaining fair competition and protecting jobs and businesses, predominantly through taxes on cheap goods from third countries, particularly from China as stated by Finance Minister Lars Klingbeil.
- The proposed customs union reform by the EU Commission also involves online shopping platforms like Amazon and Etsy, making them responsible for ensuring that customs duties and value-added tax are paid at the time of purchase, and considering a flat €2 fee on orders from third countries due to the increasing number of packages arriving daily.
