The increase in customs tariffs constitutes a real challenge for Chinese e-commerce. From Temu to Shein, via Aliexpress, the giants of the sector are facing increasing pressure from the United States and the European Union. In addition to a marked drop in foreign investments, these protectionist measures threaten to profoundly disrupt global demand. This trade tension is part of a broader context of growing economic and technological rivalries, recalling the need for Chinese companies to adapt quickly to an ever-changing environment.
Recent trade tensions between China, the United States and the European Union have led to higher tariffs on several Chinese products, seriously threatening demand for Chinese e-commerce. This situation puts companies like Temu, Shein and Aliexpress at risk, disrupting their international growth and sales.
Trade tensions and their repercussions
Table of Contents
Early trade tensions between China and the United States led to increased tariffs on a diverse range of products. This economic war aims to slow Chinese growth and protect national industries. In retaliation, Beijing also introduced similar measures, affecting American and European products.
These tensions are not limited to these two powers. The European Union, through the European Commission, recently announced increases in customs tariffs on Chinese electric vehicles. This decision, published on June 13, 2024, is justified by a threat of economic damage for European manufacturers. China responded by launching an investigation to determine the impact of European actions on its economy.
Impact on e-commerce businesses
Temu and Shein under threat
Chinese e-commerce companies, such as Temu and Shein, are directly affected by these tariff increases. These groups, previously exempt from certain taxes, risk losing this benefit, leading to increased costs for consumers. Shein, for example, could see its customs fees increase considerably from July 1, which concerns both customers in France and overseas territories.
Reassuring but fragile reactions
To reassure consumers, giants like Alibaba’s Aliexpress want to be reassuring despite the situation. However, online shopping is becoming more and more expensive, and international competition is getting tougher. Rising prices threaten to divert consumers to local or less expensive alternatives, severely penalizing Chinese online businesses.
China’s reaction and retaliatory measures
Beijing has not remained passive in the face of these initiatives. In response to tariff hikes imposed by the United States and the European Union, China has launched several retaliatory investigations. These investigations aim to determine whether the tightened tariffs threaten Chinese economic security and crucial sectors such as agribusiness and aeronautics.
Threats to foreign investments
Growing threats and protectionist actions are also impacting foreign investment in China. Since the tensions began, capital inflows have fallen by 40%, limiting the resources available for innovation and development of Chinese e-commerce companies. This phenomenon could worsen the economic situation and increase China’s dependence on its original trading partners.
Consequences for aggregate demand
Price fluctuations and drop in demand
With the increase in tariffs, the prices of products imported from China increase, which can lead to a significant drop in demand. Consumers, faced with higher costs, could switch to competing products from countries not subject to these taxes, leading to reduced sales for Chinese companies.
Business adaptations and strategies
To counter this situation, some companies are seeking to reduce their dependence on European and American markets by exploring new markets in Asia, Africa and Latin America. Furthermore, they adapt their commercial strategies by offering promotions and optimizing their logistics to reduce costs.
Impact of tariffs on Chinese e-commerce: a threat to demand
| Postman | Impact on Chinese e-commerce |
| Foreign investments | A 40% drop in foreign investment in China |
| European competition | Threat of increased tariffs on Chinese electric vehicles |
| Customs exemption | Risk of loss of exemption for Temu, Shein and Aliexpress |
| Commercial investigation | EU investigation for threat of economic damage to European producers |
| Trade war | Increased possibility of retaliation between China and the United States |
| Economic security | Application of additional tariffs on products such as port cranes |
| Chinese reactions | Retaliatory investigation launched by China against European tariff increases |
- First commercial tensions:
- Foreign investment in China reduced by 40%
- Foreign investment in China reduced by 40%
- European Commission:
- Tariff increase on Chinese electric vehicles
- Tariff increase on Chinese electric vehicles
- Customs exemption:
- Temu and Shein threatened with loss of customs benefit
- Temu and Shein threatened with loss of customs benefit
- Price increase:
- Chinese groups like Aliexpress want to be reassuring
- Chinese groups like Aliexpress want to be reassuring
- Global investigation:
- Beijing investigates the economic damage caused to European manufacturers
- Beijing investigates the economic damage caused to European manufacturers
- Beijing’s retaliation:
- Beijing threatens Europe with countermeasures
- Beijing threatens Europe with countermeasures
- Controversial subsidies:
- European Commission must prove threat of harm
- European Commission must prove threat of harm
- Trade war:
- Salvo of additional customs duties by the United States
- Salvo of additional customs duties by the United States
- Economic security:
- Increased customs duties on Chinese port cranes
- Increased customs duties on Chinese port cranes
- Chinese counter-investigation :
- Beijing responds to EU customs actions
- Beijing responds to EU customs actions
- Foreign investment in China reduced by 40%
- Tariffs on Chinese electric vehicles increased
- Temu and Shein threatened with loss of customs benefits
- Chinese groups such as Aliexpress seek reassurance
- Beijing investigates economic damage to European manufacturers
- Beijing threatens Europe with countermeasures
- European Commission must prove threat of harm
- US launches additional tariffs
- Increased tariffs on Chinese port cranes
- Beijing responds to EU customs actions