These tax breaks are crucial for Shein and Temu, allowing them to sell clothes, accessories and gadgets at steep discounts compared to their EU competitors. Critics of Shein and Temu in the United States have already complained that they use an import tax exemption there to undercut rivals and avoid customs inspections of their products. Germany has recently revealed that it backs the scrapping of some EU import taxes, which could potentially see the winding up of tax breaks for cheap packages.
This is because currently, parcels bought online from a country outside the EU are exempt from custom duties if their total value is under €150. These tax breaks have been crucial for Chinese online retailers such as Temu and Shein, allowing them to charge significantly lower prices than their European counterparts and gain a massive following. These retailers usually sell clothes, gadgets and accessories at a steep discount.
Shein and Temu have also been receiving import tax breaks in the US, which have meant that their packages do not necessarily have to be checked by customs. Similarly, due to the current EU tax breaks, packages coming into the EU are also not being inspected at the moment, making it increasingly difficult to ascertain whether they meet import regulations. These changing regulations could potentially be part of a larger reform plan suggested by the European Commission, that will take a closer look at EU customs laws as a whole.
Shein is currently planning to go pu.
