The European Commission on Thursday unveiled a proposed 2% import charge on select goods from online retailers Temu and Shein, aiming to curb the “desertification” of European high streets caused by the dominance of low-cost, fast-delivery e-commerce platforms, according to a document obtained by Reuters.
The measure, which would apply to products valued under €150, marks the latest effort by EU regulators to address the economic pressures facing traditional retail sectors. The Commission cited a 2023 study by the European Retail Confederation, which found that 34% of small retailers in Germany, France, and Spain reported declining foot traffic due to online competition, with 18% citing “sustained financial losses.”
European Commissioner for Internal Market, Thierry Breton, stated in a press conference that the charge would “rebalance the playing field” for local businesses. “The current system allows foreign platforms to operate with lower overheads, which undermines our retail ecosystems,” he said. The proposal requires approval from the European Parliament and member states, with a vote expected by mid-2024.
Temu and Shein have not publicly responded to the proposal, but industry analysts note the charge could complicate their expansion strategies. A 2023 report by McKinsey & Company highlighted that Temu’s EU market share reached 7% in 2023, while Shein’s grew to 4% in the same period, driven by aggressive pricing and rapid logistics networks.
The Commission’s plan also includes a separate review of customs procedures for small shipments, which it argues currently enable “regulatory arbitrage” by online platforms. A draft memo from the European Anti-Fraud Office (OLAF) notes that 62% of inspected parcels from the two companies in 2023 lacked proper duty declarations, though the figure remains unconfirmed by independent auditors.
France and Italy have signaled support for the measure, with French Economy Minister Bruno Le Maire calling it “a necessary step to protect local jobs.” German Chancellor Olaf Scholz’s office declined to comment, but a spokesperson emphasized that “any policy must balance competitiveness with social protection.”
The proposal faces opposition from digital trade advocates, who argue it could stifle innovation. The European Tech Alliance, a coalition of startups, released a statement warning that “targeted levies risk deterring investment in emerging e-commerce models.” The group pointed to a 2022 EU Court of Auditors report noting that 12% of small businesses using online marketplaces reported increased sales, though the data does not isolate Temu or Shein’s impact.
EU lawmakers are expected to debate the charge alongside a broader review of digital taxation, which includes a proposed 5% tax on large tech companies’ revenue. The Commission’s internal timeline indicates a final decision could be reached by December 2024, pending negotiations with member states.
As the proposal moves forward, the Commission has scheduled a public consultation period ending on October 31, 2024, to gather feedback from stakeholders. The outcome could set a precedent for how the EU addresses similar challenges posed by global e-commerce firms in the future.
