On February 7, local time, US President Trump signed an executive order, deciding to suspend the cancellation of the "minimum" tariff exemption policy for small parcels of less than 800 US dollars from China. It comes less than a week after Trump removed the tax-free threshold.
What is behind the repeated "small tax exemption" policy?
American consumers rely on small tax exemptions to buy low-priced goods, especially good ones from China. If the tax exemption policy is abolished, it will directly lead to a rise in commodity prices and increase the cost of living for consumers. In the short term, it will be difficult to find alternative sources of low-cost goods.
What's more, U.S. Customs is not prepared to handle such a huge volume of package declarations. Hundreds of thousands of small packages are shipped from China to the United States every day, more than 1 billion pieces a year, and the United States Customs has not yet established supporting systems and processes, and when the new regulations are implemented, it will inevitably fall into chaos, resulting in a large number of packages squeezed. This "God operation" makes enterprises face great difficulties in developing long-term production and sales plans, and market confidence is frustrated.
Although Trump has suspended the abolition of small tax exemptions, the US government has not made clear whether it will adjust again in the future.
The EU may scrap the €150 tax exemption
At the same time, recently, the European Commission issued an announcement on the official website: the EU will officially cancel the implementation of many years of "duty-free import goods below 150 euros" policy (originally applicable to B2C orders with a value of less than 150 euros), instead of imposing tariffs on all imported goods.
Action taken by the European Commission
Removal of small exemptions: Removal of tariff exemptions for low-value parcels worth less than 150 euros, and all imported goods are subject to formal customs declaration and payment of duties.
A proposed "non-discriminatory fee" on imported goods is intended to help customs "properly control" imports.
Enhanced customs checks: E-commerce platforms are required to provide detailed cargo information before goods arrive in the EU so that customs officials can inspect and monitor packages more effectively.
Clarify the responsibility of e-commerce platforms: Require e-commerce platforms such as Temu, Shein, aliexpress and Amazon to take responsibility for the compliance of the goods they sell with European safety and quality standards.
Temu and SHEIN are 'named'
Cross-border e-commerce platforms Temu and SHEIN occupy an important position in the European and American markets due to their low price advantages.
The EU's policy is aimed at e-commerce platforms such as Temu and SHEIN, as well as Amazon, in response to the flood of counterfeit and unsafe goods coming to Europe from Asia.
From 2023 to 2024, the number of e-commerce packages imported into the EU doubled. In 2024, 4.6 billion low-value packages entered the EU, equivalent to 12 million a day and three times as many as in 2022. More than 91 percent of packages worth less than 150 euros came from China. According to the draft, the sheer volume of these goods creates "unsustainable pressure on the authorities."
The implementation of this new measure, the double superposition of textile and apparel tariffs and value-added tax, will lead to the final price of apparel products increased by 15%-40%, posing a greater challenge to price-sensitive consumers and small and medium-sized sellers. In addition, the EU also plans to establish a processing fee of 1 to 3 euros per package, which further increases the operating costs of enterprises and may lead to their profit margins being squeezed.
In general, in the face of the EU's new policy changes this time, textile and garment enterprises need to consider from many aspects.
The weavers can adopt these strategies
1. Explore emerging markets and reduce market risks
With the further release of the consumption potential of emerging markets, such as Southeast Asia, the countries along the "Belt and Road" and Africa and other regions of the e-commerce market growth rate, with greater growth potential and profit margins. Textile and garment enterprises can take advantage of market opportunities in these regions to expand new sales channels. Build green competitiveness through regional and bilateral trade agreements, such as RCEP and ESG strategies. At the same time, the use of promotional nodes and other business opportunities to carry out targeted marketing activities to enhance brand awareness.
2. Optimize the supply chain layout to ensure smooth and fast logistics
Establish overseas warehouses in overseas markets to achieve local storage and distribution of textile and garment products. In this way, the distance and time of cross-border transportation can be reduced, improving the customer experience. At the same time, overseas warehouses can better respond to fluctuations in market demand and improve the flexibility of the supply chain. And cooperate with professional logistics service providers to ensure the smooth and efficient logistics process. In addition, efficient logistics services increase the speed of product delivery and enhance customer satisfaction.
3, improve the added value of products to meet differentiated needs
Strengthen the innovation ability of the design team, combine fashion trends and consumer needs, and develop more attractive products. For example, the excellent Chinese culture and global trend culture are integrated into the product design to form a unique brand aesthetics. Develop textile and garment products with special functions, such as waterproof, breathable, antibacterial and other functional fabrics. In addition, customized or differentiated products can be introduced to meet the needs of different markets and consumers.
4. Strengthen brand building and establish image and reputation
Identify the core values and unique selling points of the brand to differentiate itself from competitors. For example, emphasizing the environmental protection, comfort or fashion of products to attract specific consumer groups. According to the cultural background and consumption habits of different markets, local operations are carried out. This includes aspects such as product design, marketing strategy and after-sales service to better adapt to local market needs. In the process of brand building, enterprises need to work hard in product quality, after-sales service and consumer experience to establish a good brand image and reputation.
Future outlook: Turn around and survive
Trump suspended the cancellation of small tax exemption treatment and the EU will cancel the 150 euro tax exemption threshold policy changes, marking that the textile and garment industry will also face new changes. This is both a challenge and an opportunity. However, from the policy level of our country, the government is also actively taking measures to support the development of the textile and garment industry. We introduced a series of tax and fee reduction policies to ease the burden on enterprises. Strengthen trade negotiations with other countries, promote multilateral trade cooperation, and create a good trade environment for enterprises. Textile enterprises should actively adjust their strategies to adapt to the new market environment. Ensure the long-term sustainable development of the enterprise.
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