Fashion industry tycoon urges stricter regulations on tax evasion in fast-fashion sector
Taking Aim at Small Package Imports: Calls for a European Crackdown on Market Disruptors
The leader of Inditex, the parent company of Zara, has voiced his support for a US-style clampdown on small goods shipments across Europe to even the playing field between Chinese and European manufacturers.
Chinese heavyweights Shein and Temu have shaken up the global fashion industry in recent years, creating tension for established competitors. A significant factor contributing to their rapid ascension has been their reliance on a tax loophole known as the "de minimis" rule. This loophole permits duty-free entry of small packages of goods.
Over one-third of the goods imported under the "de minimis" rule last year arrived in America from Shein and Temu.
"What's been long overdue is a level playing field... for all contenders to abide by the same rules," Oscar Garcia Maceiras said in an interview with the BBC.
On April 2nd, former US President Trump nixed the loophole for goods directly imported from China and Hong Kong, while the UK is currently revisiting the policy.
Joining the Chorus of Critics
Maceiras isn't alone in advocating for the removal of the loophole. George Weston, CEO of Primark's parent company Associated British Foods, praised such action as a positive boost for domestic businesses.
Sainsbury's CEO Simon Roberts also urged the UK government to close the loophole swiftly to prevent the possibility of subpar goods being redirected from America to Europe due to Trump's tariffs.
Currys chief executive Alex Baldock voiced concerns to the Financial Times that "stock is already being routed into European markets in a straightforward dumping manner". He highlighted the likes of Shein, Temu, Alibaba, TikTok shop, and primarily, Amazon marketplace, as the main sources of this stock—many of which have a large number of Chinese vendors.
City AM has reached out to the Treasury for comment.
It's worth noting that the EU presently follows its own customs regulations and duty exemptions, which typically promote trade while maintaining customs compliance. Changes to these policies would likely be part of broader trade adjustments rather than a direct reaction to US policies.
In the U.S., the de minimis exemption previously allowed imports worth less than $800 to go duty-free. However, this exemption is being curtailed for imports from China and Hong Kong, effective May 2, 2025. This adjustment introduces new tariffs and fees on packages, potentially increasing consumer costs for online purchases from these regions.
The retail industry, along with other businesses, is calling for a closure of the "de minimis" rule loophole to ensure fair competition in the European market. George Weston, CEO of Primark's parent company Associated British Foods, supports such action, stating it would be beneficial for domestic businesses. Alex Baldock, Currys chief executive, voiced concerns about stock being routed into European markets in a dumping manner, with Shein, Temu, Alibaba, TikTok shop, and primarily, Amazon marketplace, as the main sources of this stock.
