The latest news indicates that the German government is drafting new regulations to ensure that the Chinese low-cost e-commerce giants under “Pinduoduo”, such as Temu and Shein, comply with standards in product safety, environmental protection, consumer rights, customs, and tax laws.
According to a report from the French magazine “Capital” cited by Reuters, the German Retail Federation (HDE) has been lobbying the government to “ensure a fair competitive environment for all market participants,” stating that customs authorities lack the ability to inspect whether all products meet EU standards.
The business magazine also cited a spokesperson for the German Ministry of Economy and Climate as saying, “Retailers from third countries must enforce existing regulations as strictly as EU retailers. This is crucial.”
The German Ministry of Economy and Climate Protection is currently drafting an e-commerce action plan and evaluating new measures and proposed revisions to existing regulations. In recent months, the ministry has held discussions on this issue with the German federal states, the European Commission, and the European Parliament.
The ministry’s State Secretary, Sven Giegold, met with representatives from Temu and Shein in June.
Reuters quoted a document obtained on Wednesday, September 4, stating that the ruling party in Germany, the Social Democratic Party (SPD), is calling for a significant increase in customs inspections and the removal of the €150 (approximately $166) tax-free threshold.
Under current EU regulations, packages purchased online from non-EU countries are exempt from import duties if their value is below €150. Goods valued above €150 are subject to customs duties and value-added tax.
Critics argue that the current customs policy encourages online retailers to undercut prices of competitors and evade customs inspections.
A document from a meeting of the SPD parliamentary group stated, “Many wholesale and retail companies are deeply concerned about unfair competition from China, which distorts trade competition and poses a serious threat to the local economy.”
According to Deutsche Welle (DW) reporting in June, the leader of the largest opposition party in Germany, the Christian Democratic Union chairman Friedrich Merz, called for stricter and more effective oversight of Chinese online selling platforms.
In a statement, he stated, “It is estimated that up to 200,000 packages are shipped from China to Germany every day without any inspection of goods, without tariffs.”
He believes that, “Ordinary products from European manufacturers should not be subject to comprehensive controls while allowing a large number of cheap products from Asia to enter the country without tariffs and goods inspection.”
The Financial Times reported in early July this year that the EU is planning to impose tariffs on low-priced goods traded on e-commerce platforms, mainly targeting Temu, Shein, and Alibaba’s AliExpress.
The report stated that data from the European Commission showed that in 2023, a total of 23 billion tax-free goods with a value below €150 entered the EU. The European Commission proposed to remove the threshold for tax-free goods below €150.
The United States also has a similar tax-free policy for low-value individual packages. According to data from U.S. Customs and Border Protection (CBP), as many as 1 billion tax-free small packages entered the U.S. in the 2023 fiscal year, with goods from China accounting for 60% of the total.
Under the current Trade Facilitation and Trade Enforcement Act (TFTEA), the minimum tariff threshold for imports into the U.S. is $800. In order to prevent cheap dumping by Chinese cross-border e-commerce platforms, the U.S. Congress is considering several legislative proposals to eliminate or reduce this minimum threshold.