Shein and Temu prices at risk of increasing, here’s why

Higher Prices on Shein and Temu in Europe?

Could prices on Shein and Temu be on the rise? There is a risk in Europe.
The EU Commission is set to impose taxes on major Chinese online retail platforms, such as Aliexpress, Temu, and the famous Shein.

Chinese e-commerce platforms have had a significant impact on Western trade thanks to a winning business formula: low-cost production, direct shipping through powerful logistic channels, and very low profits.
They have become global giants dominating the market for a myriad of products, from fashion to electronics.

Imposition of Taxes in Europe

These online commerce behemoths started paying VAT only from July 2021 and are currently exempt from customs duties and tariffs for shipments valued under 150 euros.
However, Europe is looking to change this system by introducing tariffs, potentially making goods purchased on Shein and Temu more expensive.

The European Commission is convinced that Chinese platforms engage in unfair competition.
According to the British newspaper Financial Times, this summer it will propose eliminating the minimum threshold of 150 euros to impose customs duties on all orders from outside the EU, not just from China.
Tariffs could then be introduced for even lower spending levels.

This measure was already proposed last May and aims to protect local industries by making Chinese products more expensive.
The same happened with electric vehicles from the Asian giant, which now cost up to 38.1% more due to the tariffs that came into effect this month.

Impact on European Traders

Last year, 2.3 billion euros worth of goods entered the European Union through these platforms.
European merchants are beginning to protest against this wave of extremely low-priced products with which they cannot compete, given higher costs for managing a physical store.

The United States is considering similar actions, especially because, on the other side of the Atlantic, rules are even more favorable to Chinese online trade: all products costing less than 800 dollars enter without paying any taxes.

This situation appears no longer tolerable in the West.
Consequently, higher prices on Shein and Temu seem to be on the horizon.