Chinese Goods Redirected to Europe Raise Concerns: British Retailers Call for Abolishment of the Minimum Tax-Free Allowance to Combat Competition

After the United States imposed a 145% tariff increase on Chinese goods, Chinese exporters redirected their goods to Europe, raising concerns among European industries. British retailers have pointed out that these goods, competing at low prices through platforms like SHEIN and Temu, are putting pressure on the local retail sector. British industry leaders are urging the government to abolish the "minimum tax-free threshold" policy, following the U.S. example by ending the $800 tax-free threshold, to ensure a fair competitive environment.

Shift of Chinese Goods to European Market Raises Dumping Concerns

In April 2025, U.S. President Trump announced tariffs of up to 145% on Chinese imports, covering a wide range of products, with only a few exceptions such as pharmaceuticals, tech hardware, and semiconductors. This move has led Chinese exporters to seek alternative markets, with Europe becoming a primary target. According to Daniela Sabin Hathorn, a senior market analyst at Capital.com, this shift could lead to new trade routes and more complex supply chain structures, as companies are rearranging their shipping methods to avoid U.S. tariffs.

Alex Baldock, CEO of UK electronics retailer Currys, noted clear signs that Chinese goods originally intended for the U.S. are being redirected to the UK and other parts of Europe. He stated, "These products may be sold through platforms like SHEIN, Temu, Alibaba, TikTok stores, with Amazon playing a crucial role."

UK Retailers Concerned About Imbalanced Competition

Helen Dickinson, CEO of the British Retail Consortium (BRC), expressed that these redirected goods are often lower quality and competitively priced, putting pressure on local retailers. She noted, "Due to U.S. tariff policies, some lower-quality goods may be redirected from the U.S. to Europe, and this risk is a major concern for retailers."

Dickinson emphasized that given the current tense geopolitical situation, the UK government should reassess the existing "de minimis" policy to ensure the best interests of local retailers and consumers. She pointed out that the current rules allow overseas parcels valued under £135 to be exempt from tariffs, giving foreign e-commerce platforms an unfair price advantage.

Proposal to Abolish "De Minimis" Policy, Referencing U.S. Policy

In the U.S., the Trump administration recently ended the "de minimis" tax exemption policy for parcels valued under $800. According to Investopedia, this policy was implemented in 1938 to simplify customs procedures for small imports, but with the rise of cross-border e-commerce, it has been heavily exploited, becoming a main channel for Chinese e-commerce platforms like SHEIN and Temu to enter the U.S. market. This policy change significantly impacts U.S. consumers by potentially increasing the cost of small imported goods.

Following the U.S. cancellation of this policy, the UK industry is urging the government to act swiftly. Baldock stated, "The EU is quickly following the U.S. decision, and the UK should not lag behind." He believes that without policy adjustments, UK retailers will continue to face price pressure from Chinese goods, further weakening local industry competitiveness.

European Countries Monitor Shift in Chinese Exports

Not only the UK, but French President Macron has also expressed concern over the trend of Chinese goods being redirected to Europe. He stated, "The tariffs on China are very high... some products may be redirected to other markets, which will obviously impact our economy and cause imbalances in certain industries and markets." Macron called for the EU to strengthen defenses against the influx of goods from "third countries" to protect local industries.

Additionally, according to a New York Times report, the wave of Chinese exports has not yet peaked. Despite U.S. tariffs, Chinese exporters are actively seeking new markets, with the EU and South Korea, among other U.S. allies, becoming potential targets. The report noted that while tariffs may suppress export growth in the short term, they have not fundamentally stopped the global expansion of Chinese goods.

Industry Calls for Policy Parity to Maintain Fair Competition

UK retailers generally believe that the current "de minimis" policy no longer aligns with current trade realities. This policy allows overseas e-commerce platforms to send goods valued under £135 directly to UK consumers without tariffs, creating a price advantage. The BRC and several retailers are urging the government to follow the U.S. example, abolish this tax exemption threshold, and strengthen regulation of cross-border e-commerce.

According to a MoneyDJ report, some retailers pointed out that without action, low-priced dumped goods will continue to erode the UK market, causing long-term impacts on local brands and employment. The industry emphasizes that policy adjustments are not just a trade issue but also concern industry fairness and consumer rights.

Chinese Goods Redirected to Europe Raise Concerns: British Retailers Call for Abolishment of the Minimum Tax-Free Allowance to Combat Competition

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