France is lining up a historic €2 tax on low-quality fashion imports, which targets Chinese online shopping behemoths such as Shein and Temu, responsible for flooding Europe with very cheap goods. The tax is to be tabled by the French parliament this week, after which it is to come into effect next year. This is a very bold step by France, which is taking a very short timeframe compared to what the European Union is proposing, which is to kick in only by 2028.
French parliament debates €2 tax on imports of fast fashion clothing
The French parliament is to vote on this levy of €2 as early as Monday, following on from it already having passed its first vote within the Senate. The French Budget Minister, Amélie de Montchalin, has highlighted that this is taking into account the reform on the EU Customs Union due to take place in 2028, encouraging the introduction of mechanisms to cover small parcels arriving within Europe.
The new legislation is an expression of France’s discontent with the present mechanism whereby parcels no more than €150 in value can enter the EU without being charged any customs duties, but with VAT being applied. An estimated €500 million is projected to be raised by this tax on small parcels within the next year. The member-states are also hopeful that this tax-exemption might be waived come early next year instead of 2028, with authorities seeking an easy and short-term remedy to this effect.
Important aspects of France’s taxation plan:
- A €2 charge on all low-value fashion imports arriving from outside the EU
- An extra €5 environmental footprint charge is being contemplated to be introduced later
- Potential increase to €10 per package by 2030 regarding environmental impact
- The estimated annual revenue generation is €500 million for the French treasury
Chinese players lead the European small parcels volume share
The magnitude of this challenge can be appreciated by looking at import figures, which show that there are 4.6 billion low-value consignments that entered the market in 2024, consisting of 12 million parcels on a daily basis. The European Commission highlighted that 91% of these parcels actually come from China, while France got 800 million last year alone via platforms such as Shein and Temu.
These Chinese online shopping platforms have raised considerable concerns about unequal competition, as they violate European manufacturing norms and involve illicit copies. The EU executive has pointed out that these commodities hurt the environment and climate change, while European retailers claim that they are subjected to unequal competition due to foreign shopping platforms that fail to meet rigorous European product norms.
Green issues trigger other proposals on taxes
The French parliament is currently debating introducing a supplementary €5 environmental footprint tax on top of the packaging tax rate starts at €2 but can grow to €10 per pack by 2030. The proposed introduction of this environmental element is to cover concerns about increased landfill quantities resulting from dubious durability and shorter lifetimes evident within ultra-low-price items flooding European markets, produced by Chinese suppliers.
While France is pressing ahead with unilateral measures, agreements on scrapping the remission of duties on low-value ordered items across the European Union exist, but are being faced with implementation issues. European Union Trade Commissioner Maros Sefcovic argued that a political agreement indicates Europe is serious about ensuring fairness on issues of competition and business interests.
The aggressive taxation policy on small parcels emanating from Chinese e-commerce platforms exemplifies a growing level of European discontent with regard to both unequal competition and environmental issues. The EU is still grappling with implementation deadlines up to 2028, but France is already taking bold steps to raise considerable funds while safeguarding local shop owners. The trailblazing policy can thus offer a best practice example to other European countries trying to counter the wave of very cheap imports.