In response to the steep U.S. tariffs, Chinese apparel exporters are shifting a significant portion of their volume toward the EU. This surge in low-priced goods — often via e-commerce platforms like Shein and Temu — is putting intense pressure on European textile producers. At the same time, the EU’s permissive €150 duty-free threshold for small parcels is coming under fire as a significant loophole.

The New Export Pattern: Why China Is Betting on Europe

In the first half of 2025, Chinese exports of textiles and clothing to the EU grew by around 20 percent in both value and volume compared to the same period in 2024, according to Euratex. That increase largely reflects rerouting: faced with higher U.S. tariffs, Chinese manufacturers are seeking alternative markets, and Europe has become a natural outlet.

The European Central Bank has projected that this trade diversion could even dampen inflation in the euro area by up to 0.15 percentage points as cheaper imports flood in. Chinese industry reports also describe a broader “pivot” in export strategy: front-loading shipments ahead of tariff deadlines, scaling up e-commerce exports, and diversifying supply chains to reach Western markets through new logistics hubs.

The €150 “De Minimis” Threshold Under Fire

One of the leading structural enablers of this surge is the EU’s de minimis exemption, which allows small parcels valued below €150 to enter without incurring customs duties. That rule has made ultra-low-cost Chinese offerings highly competitive in the European market.

By contrast, the U.S. has effectively closed similar loopholes; nearly all imported parcels now face a minimum duty. The European Commission has proposed eliminating the €150 threshold and introducing a flat €2 handling fee for small parcels, with a reduced fee of €0.50 for items shipped from within European warehouses.

This change would significantly impact platforms like Shein and Temu — in 2024, approximately 91 percent of small parcels entering the EU originated in China. China’s Ministry of Foreign Affairs has already criticized the proposal, saying it would distort trade and calling for a “fair, transparent and non-discriminatory” approach.

Impacts on the European Textile Industry

The shift in trade flows is already shaking Europe’s manufacturing base. Textile associations warn of risks from dumping, unsustainable price competition, and erosion of domestic production capacity. The European textile and fashion sector contributes about €170 billion annually and supports roughly 1.3 million jobs.

Industry groups are demanding faster reforms, urging the European Commission to eliminate the de minimis threshold by 2026, rather than 2028. Some associations have even proposed higher parcel fees — up to €20 — to finance customs checks and strengthen border controls. French and Italian brands are running campaigns encouraging consumers to buy local, highlighting the economic and environmental cost of fast fashion imports.

Risks, Trade Politics & Inflation Dynamics

Economists warn that the flood of cheap imports could exert deflationary pressure across Europe. The ECB has noted similar effects in previous trade cycles, where redirected Chinese exports have lowered price levels.

There is also growing concern over dumping practices — selling goods at a loss — and distortions in the textile value chain. European producers are calling for stricter anti-dumping measures and more transparent oversight of digital marketplaces.

Diplomatically, this issue is becoming a flashpoint. Beijing has already voiced strong objections to the EU’s small-parcel fee proposal, signaling potential tensions in broader EU-China trade relations.

What European E-Commerce and Fashion Brands Should Watch

Monitor customs reform proposals closely. The fate of the €150 threshold and any new handling fee will directly affect pricing and competitiveness.

Reassess sourcing strategies. European brands may need to emphasize traceability, near-shoring, or sustainable materials to compete on non-price factors.

Strengthen brand differentiation. Quality, durability, and environmental performance can justify premium positioning against low-cost imports.

Engage in trade advocacy. Industry associations and chambers of commerce can help shape balanced regulatory outcomes.

Plan for regulatory shifts. If new duties or fees are introduced, cross-border e-commerce margins could tighten faster than expected.

China’s rerouting of apparel exports toward Europe highlights how global trade dynamics can shift overnight under tariff pressure. While European consumers may benefit from cheaper goods in the short term, the long-term challenge for the EU lies in maintaining industrial competitiveness, fair taxation, and sustainable production across its fashion ecosystem.

The post China Redirects Apparel Exports to Europe: What It Means for the EU Fashion Market appeared first on Cross-Border Magazine.

China's e-commerce market has seen tremendous growth from 2020 to 2024, solidifying its position as the largest in the world. In 2023, the market was valued at approximately $2.22 trillion; by 2024, it is projected to surpass $2 trillion. It is continuing its upward trend with a forecast to reach $4.77 trillion by 2032. The compound annual growth rate (CAGR) is expected to be around 8.9% from 2024 to 2032.

Several factors, including high internet penetration, widespread smartphone usage, and adoption of digital payment solutions like Alipay and WeChat Pay drive the market's rapid expansion. Live commerce and events like Singles' Day also significantly boost consumer engagement and sales.

Despite the market's growth, the pace of expansion has stabilized as it matures, with challenges such as intense competition, price wars, and regulatory hurdles coming to the forefront. Nevertheless, China's e-commerce sector remains a major force, not only domestically but also in cross-border trade, with cross-border GMV (gross merchandise volume) projected to grow to $847 billion by 2027​

China e-commerce growth timeline 2020-2024

E-commerce in China experienced significant growth from 2020 to 2024, driven by the country's digital infrastructure, consumer behavior shifts, and innovations in retail technology. Here’s a general overview of the key trends during this period:

1. 2020: Acceleration Due to COVID-19

• Impact of COVID-19: The pandemic caused a significant boost to China's e-commerce as consumers shifted to online shopping due to lockdowns and social distancing measures.

• Record-breaking growth: In 2020, China's e-commerce sector grew by over 20%, reaching an estimated $2.29 trillion, making it the largest e-commerce market in the world.

• Mobile Commerce: Mobile commerce (m-commerce) played a central role, with most sales coming from mobile devices fueled by platforms like Taobao, JD.com, and Pinduoduo.

2. 2021: Integration of Livestreaming and Social Commerce

• Livestreaming e-commerce: Livestreaming emerged as a powerful sales channel, with platforms like Taobao Live, Douyin (TikTok), and Kuaishou leading the way. By 2021, livestreaming sales accounted for about 10% of e-commerce revenue.

• Expansion of rural e-commerce: Policies aimed at promoting e-commerce in rural areas allowed more farmers and producers to connect with consumers directly, further boosting growth.

• Cross-border e-commerce: The growth of cross-border e-commerce allowed Chinese consumers to purchase international products, with platforms like Tmall Global and JD Worldwide proliferating.

3. 2022: Regulatory Shifts and Stabilization

• Regulation impact: The Chinese government imposed stricter regulations on technology and e-commerce giants (e.g., Alibaba and Meituan), which led to some slowdown in growth, though the sector remained strong.

• Consumer trends: There was a shift toward sustainability and “green” products and increased demand for fresh food and healthcare-related goods, including cosmetics and supplements.

• Market saturation: While Tier 1 cities (Beijing, Shanghai, etc.) became more saturated, companies focused on growth in lower-tier cities and rural areas.

4. 2023: Rise of Autonomous and AI-driven Solutions

• AI and automation: E-commerce platforms adopted AI-driven technologies for personalized shopping experiences, predictive analytics, and automated customer service. Automated delivery systems, including drones and robots, started gaining ground.

• Omnichannel strategies: Many retailers developed omnichannel approaches, blending physical and digital shopping experiences (e.g., integrating offline stores with e-commerce apps through QR codes and mobile payments).

• Sustainable e-commerce: Growing consumer demand for sustainable and environmentally friendly practices continued to shape product offerings and logistics.

5. 2024: Steady Growth with Tech Innovation

• Steady market growth: As the sector matured, growth rates stabilized. However, innovations like virtual reality (VR) shopping experiences, advanced AI customer service, and fast logistics continued to drive sales.

• Web3 and blockchain applications: There was increasing interest in integrating Web3 technologies and blockchain to improve supply chain transparency and secure customer data.

• Environmental focus: Green logistics, sustainable packaging, and carbon-neutral initiatives were widely adopted by major e-commerce players.

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