"Shop like a billionaire": fast fashion from China in the focus of the German government

Fatih-Kağan Taşkoparan

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Chinese shopping platforms have conquered the German market. They are called Wish, Temu, Shein and co. and offer a huge selection of cheap products. However, the meteoric rise of Chinese companies has been accompanied by a great deal of criticism: The German government, for example, complains, as "Wirtschaftswoche" reports reportedThe Ministry of Economic Affairs is now planning to enforce stricter market surveillance and is pushing for a reform of customs procedures. The Ministry of Economic Affairs is now planning to enforce stricter market surveillance and is pushing for a reform of customs procedures. We wanted to find out whether these considerations will bring about improvements from customs expert Markus Bitzer know.

New control mechanisms for Shein and Temu?

The high profile of the two online platforms for fast fashion has not stopped at politics. Due to a lack of customs clearance, environmental and safety risks and product quality concerns, the German government has reached a consensus on stricter controls of the two Chinese companies. The German government is responding in particular to Claims by various members of parliament, including Michael Meister (CDU) and Economics Secretary Udo Phillip, to implement stricter and more extensive controls.

Meister is calling for the German government to take a clear stance against the aggressive market strategy of Chinese offshoots as well as comprehensive controls on imported goods. A reform of the customs procedure should also help to strengthen market surveillance. Udo Phillip, meanwhile, criticizes the safety and quality standards of the two low-cost suppliers. This is also confirmed, for example, by the Survey This was supported by the European toy industry, which classified 18 of a total of 19 toy products from Chinese companies as a significant safety risk in its inspection.

A Basic consensus for stricter control of Temu and Shein already exists at a political level, but implementation is very difficult due to the large import volume of the two major providers. This is because almost 400,000 parcels arrive at German freight ports every day. Comprehensive control would only be possible with a massive increase in personnel.

"Who says that the abolition of the 150-euro limit will bring about tax honesty?"

Temu and Shein's strategy cleverly circumvents customs regulations: Until now, customs law has regulated a duty-free limit of up to 150 euros for goods sold. Temu and Shein make use of this regulation and therefore specifically sell their goods below this exemption limit. If an order value does exceed the exemption limit, the consignments are split into several partial deliveries in order to avoid customs inspection. Brussels plans to levy additional customs duties on consignments worth less than 150 euros by 2028 if they originate from non-EU countries. "In my opinion, the planned abolition of the 150 euro limit will not bring any improvement," counters customs expert Markus Bitzer. "Because what does that mean? Customs duties will be charged for goods worth less than 150 euros and importers will be obliged to submit a customs declaration. But nothing more," continues Bitzer. "Who says that the abolition of the 150 euro limit will bring about tax honesty if the invoice is still significantly below value?"

The import of goods from third countries into the EU is generally permitted without restrictions. An import ban on Temu & Co. could at least lead to correct customs procedures within a few weeks, explains Bitzer. However, this would not solve the problem of under-invoicing - but it might solve the problem of product quality.

Anti-dumping and countervailing duties could also be introduced: This means you raise import prices by adding appropriate surcharges, but at the same time ensure more work for customs, Bitzer continues. "But in this way, low-cost suppliers could be forced to comply with customs regulations and the market correction - if the prices are comparable to those in the EU."