Cheap Imports Facing EU Tariffs: A Threat to Budget Online Retailers?
The Government seeks EU tariffs on economical imports.
Catch up on the latest buzz as the EU Commission contemplates imposing customs duties on goods from third countries below the 150 Euro mark. Today, the finance ministers are scheduled to discuss this very matter. Even German Finance Minister, Lars Klingbeil, voices his disapproval of predatory pricing and advocates for equitable trading conditions. Notable online marketplaces such as Temu and Shein could be paying a steeper price.
In the ongoing battle against unfair business practices, Germany is pushing to implement tariffs on low-cost goods from third countries within the EU. According to Klingbeil, "It's about ensuring fair trading conditions and thus safeguarding jobs. Those who pay fair wages and adhere to the rules shouldn't be at a disadvantage."
During the finance ministers' meeting, issues like the reform of the customs union will be on the agenda. The EU aims to implement changes that would make previously duty-free, cheap goods from third countries subject to duty. The focus, Klingbeil claims, is on "junk products" from China, price dumping, and excess production.
Looking back, the EU Commission drew up plans for such a reform approximately two years ago. They proposed that numerous goods under 150 Euros be subject to customs duties. Reduced taxes currently apply to goods valued below 150 Euros, with few exceptions for items like tobacco or perfume. This proposed change is expected to create an equal playing field for all traders, regardless of their location.
Online shopping platforms such as Amazon and Etsy might be tasked with ensuring that customs duties and VAT are paid upon purchase should this reform be implemented. The rise in small parcel deliveries with low value in the EU over the past few years has been fueled by online trade.
Recent whispers suggest that the commission could instate a flat-rate charge of up to two Euros on such orders from third countries. The EU Commission estimates that approximately 12 million parcels entered the EU daily in 2024, a significant increase from the preceding years[ENR1]. Platforms like Temu and Shein may face this new tax.
A Closer Look at Temu and Shein
Temu is an online marketplace, where numerous companies sell a variety of goods. Having ventured into Germany since the spring of 2023, it has earned recognition for offering rock-bottom prices and steep discounts. Direct shipping from the manufacturer to customers helps maintain these low prices.
Shein, a fashion company originally hailing from China but now headquartered in Singapore, acts as a manufacturing, retail, and marketplace firm[ENR2]. By simply manufacturing and shipping products worldwide, Shein is able to quickly respond to fashion trends and keep prices incredibly competitive.
Sources: ntv.de, mbr/dpa
- Europe
- Trade
- Germany
[ENR1] Source: EU Commission estimate (no specific date available)[ENR2] Source: Bundestag Research Service, Analytical Reports Online (ARO-27553)
- The EU Commission's proposed reform, aimed at creating an equal playing field for traders, may require online retailers like Amazon and Etsy to ensure payment of customs duties and VAT on low-cost goods from third countries, such as Temu and Shein.
- The finance ministers' meeting agenda includes discussions on industry concerns, including the reform of the customs union, which could impact employment policies of online retailers like Temu and Shein, as well as other businesses.
- In the broader context of business and politics, Germany is advocating for tariffs on cheap goods from third countries within the EU, arguing that it's essential for ensuring fair trading conditions in the community and safeguarding employment, including jobs within the online retail sector.
