Cheap Imports under Scrutiny: Europe Takes Action Against "Trash Products"
The Government of the U.S. seeks tariffs on inexpensive goods from the EU
In an effort to level the playing field and safeguard fair competition in the EU market, Germany is championing stricter tariffs on low-cost goods from third countries. This particular focus is set on goods primarily sourced from China. The debate was ignited at a meeting of finance ministers, where Finance Minister Lars Klingbeil voiced his concerns against dumping prices and the need for fair conditions.
In this fight against unfair competition, Germany intends to rally EU support for increased tariffs on these cheap goods originating from third countries within the EU. As Klingbeil emphasized, "We must ensure fair competitive conditions and thus protect jobs. Those who pay fair wages and follow the rules should not be the victims in the end."
At the heart of the discussions lies a proposed reform by the EU Commission, two years in the making. The reform aims to impose customs duties on goods valued at or below €150. Presently, no such duties are required if the value of the goods falls below this mark, with the exception of items like tobacco and perfume. The overall goal is to provide all traders, regardless of location, with equal competitive conditions.
As per the proposed reform, online shopping platforms like Amazon and Etsy are expected to enforce customs duties and VAT on purchases. The surge in deliveries of small, low-value packages within the EU in recent years, primarily attributed to online trade, is under close scrutiny.
Recently, the EU Commission has reportedly considered introducing a flat-rate fee of up to €2 on such orders, affecting e-commerce giants such as Temu and Shein. With an estimated 12 million such packages arriving daily in the EU in 2024—a significant increase from previous years—this reform measure could have far-reaching consequences.
Temu and Shein: Offering Minuscule Prices
Temu is an online marketplace offering various products at exceptionally low prices. The Chinese company has been active in Germany since early 2023 and has garnered attention for its low-cost products and steep discounts. Products are often shipped directly from the manufacturer to the consumer, allowing Temu to bypass intermediaries and offer competitive prices.
Similarly, Shein, originally a Chinese-based fashion company now residing in Singapore, operates as both a manufacturer, retailer, and marketplace. Being a direct supplier serves Shein well in swiftly responding to fashion trends. With minimal physical inventory and stores, Shein has maintained extremely low prices, making it a prime target for EU scrutiny.
In essence, Germany, in concert with the EU, is aiming to put a stop to the influx of low-cost, duty-free imports from third countries, notably China. By introducing tariffs on goods valued under €150 and implementing collection measures for customs duties and VAT, the EU hopes to create a level competitive playing field, ultimately protecting EU jobs and businesses from unfair competition.
Community policy discussions within the EU arefocused on imposing customs duties on goods valued at or below €150, with an aim to provide all traders equal competitive conditions. This proposed reform targets online platforms like Temu and Shein, which offer minuscule prices by bypassing intermediaries, as part of the effort to safeguard fair competition, industry, finance, employment policies, and business within the EU market.
