USA, EU, Thailand, Malaysia, Singapore... Many countries have raised taxes on cross-border e-commerce

In today's deepening globalization, cross-border e-commerce has become an important bridge connecting the world market.



However, as countries continue to update and implement new trade rules, cross-border sellers face unprecedented challenges and opportunities.



Cross-border e-commerce with textiles



In the textile industry, in the past few years, China's textile industry chain has been plagued by tariff barriers, and the cross-border e-commerce model not only perfectly conforms to the characteristics of the textile industry with a wide range of categories and a wide range of needs, but also helps enterprises bypass high tariffs by means of small parcels, so the industry is growing rapidly.



Data from the General Administration of Customs show that in the first half of this year, China's cross-border e-commerce imports and exports reached 1.22 trillion yuan, an increase of 10.5% year-on-year, 4.4 percentage points higher than the overall growth rate of domestic foreign trade in the same period.



In terms of clothing, according to the calculation data of the China Textile Association Circulation Branch, from 2019 to 2023, China's cross-border e-commerce exports of clothing increased from 145.5 billion yuan to 487 billion yuan; The proportion of apparel in China's cross-border e-commerce exports has also increased from 18.23% in 2019 to 26.61% in 2023.



It can be said that the rise and fall of cross-border e-commerce has been able to directly affect the development vitality of China's textile industry.



But on the other hand, the imposition of tariffs on our country is aimed at our industry, if through the way of cross-border e-commerce can bypass tariffs, it is meaningless to impose tariffs, so after years of vigorous development, this year, many countries and regions began to target our cross-border e-commerce industry.



Eu: To remove the duty-free threshold



On July 3, the Financial Times reported that the European Commission would recommend scrapping the current "duty-free threshold for goods under 150 euros" later this month.



The rule would apply to any online retailer that ships directly to EU customers from outside the EU. An EU official told the Financial Times that the move is mainly aimed at Chinese e-commerce platforms, because Amazon, a fellow e-commerce giant, usually uses European sellers to conduct business there and is not expected to be much affected.



According to the European Commission, 2.3 billion goods sold for less than 150 euros were imported into the EU last year. Local e-commerce imports more than doubled year-on-year to 350,000 in April, data showed.



The EU action focuses on Temu, which is owned by Pinduoduo, AliExpress, which is owned by Alibaba, and SHEIN, a clothing retailer.



United States: comprehensive targeting of cross-border e-commerce



According to Bloomberg, CNN and other media reports, the US government decided to raise tariffs on Chinese imports on September 13, 2024 local time. This initiative is mainly aimed at cross-border e-commerce platforms and their related enterprises to address the abuse of the "minimum exemption" duty-free import policy by these platforms.



In addition, the White House briefing notes that most of the goods claiming minimum exemptions to enter the United States come from several Chinese e-commerce platforms, putting American consumers at risk, undercutting American workers and businesses, and resulting in a large number of low-value products, such as textiles and apparel, being imported duty-free into the U.S. market.



Section 301 tariffs currently cover about 40 percent of U.S. imports, including 70 percent of textile and apparel imports from China. Some e-commerce platforms and other foreign sellers circumvent these tariffs by shipping goods from China to the United States, claiming minimum exemptions.



If finalized, these goods will no longer be eligible for the minimum exemption. It would also ensure that minimum exemption eligibility for products covered by trade enforcement actions is consistent across U.S. trade law. Products covered by anti-dumping or countervailing duty orders have been excluded from the minimum exemption.



Once these policies are implemented, for China's "four small dragons" that are currently developing rapidly, and even a large number of independent cross-border e-commerce stations, they will reduce their competitiveness because of tax increases, or they will need to transfer a considerable part of their profits to the U.S. government through tariffs and other forms.



Thailand: Sudden tax hike of 7%



On June 21, Thailand's Ministry of Finance officially announced that from July 5 to December 31 this year, customs will charge a 7% value-added tax on foreign imports worth less than 1,500 baht (nearly 300 yuan). After that, the government will promote the revision of the Tax Law, and the tax department will uniformly collect value-added tax on cross-border e-commerce platforms. Thai finance ministry officials bluntly said the aim was to "stem the tide of cheap Chinese goods".



According to Thai media reports, behind the introduction of this policy is "the result of collective complaints by Thai businesses." In 2023, Thailand's imports of consumer goods from China amounted to 470 billion baht, accounting for 41% of Thailand's total imports of consumer goods. Thai merchants believe that goods sold on cross-border e-commerce platforms, mailed into the country and not subject to customs duties have hit business hard.



According to statistics, more than 30 million imported packages enter Thailand every year, more than half of which are declared as items with a CIF value of no more than 1,500 baht.



"Duty-free + overseas bonded warehouse + Chinese supply chain" has become a winning weapon for Chinese sellers to dig Thailand. The new rules mean that more than 15 million parcels will be subject to VAT. An item originally priced at 1,500 baht would have to rise 105 baht (more than 20 yuan) to cover the cost of the tax.



Many countries have introduced policies for cross-border e-commerce



In January this year, Malaysia's new e-commerce regulations officially took effect, imposing a 10% low-price goods tax on low-priced imports of no more than RM500 (about 770 yuan). On e-commerce platforms such as Lazada and Shopee, a large number of overseas goods quickly saw their prices rise. An online survey shows that nearly 50 percent of Chinese sellers believe that the emergence of low-price commodity taxes has had a greater impact on sales.



Earlier, Indonesia and Singapore have introduced tax increases for cross-border small packages. Since January 1, 2023, consumers need to pay 9% consumption tax on goods purchased through cross-border channels, and can not enjoy the tax exemption policy below 400 Singapore dollars (about 2138 yuan).



Vietnam's Finance Minister, Ho Duc Phuc, also submitted a proposal to the National Assembly this month to amend the Value-added Tax Law, which suggests that the government consider adopting a 10% value-added tax rate for small cross-border e-commerce packages.



Le Quang Manh, director of the Budget Committee of the Vietnamese National Assembly, said that at present, an average of four to five million orders of packages enter Vietnam from China every day, and the value of goods is generally between 100,000 and 300,000 dong (about 28 to 84 yuan).