Chancellor Rachel Reeves recently referred to as a full-scale review of the customs treatment for low-value products coming into the United Kingdom. British retailers have made a growing number of complaints about the current $200 “de minimis” rule. They claim that this rule unduly favors international firms, particularly Chinese-based retailers like Shein and Temu. Deliveries worth under £135 have become exempt from import duties to the UK. Combined with cheap shipping and containerization, this rule has triggered an avalanche of low-cost foreign goods.
The review has already received a lot of press, which is great. This comes on the back of increased pressures on the number of parcels entering the UK unchecked under existing legislation. Retailers have long maintained that this tax-free allowance is the unfair advantage that killed brick-and-mortar’s competitive edge. Overseas companies receive a much larger benefit due to the exemption, giving them an unfair advantage. At the same time, UK businesses struggle with import duties on bigger loads, which disadvantages them competitively.
The “de minimis” threshold has allowed firms such as Shein and Temu to ship millions of low-value packages to customers in the UK and other countries. Critics claim that these products often do not meet the environmental and ethical standards British businesses pride themselves on. They are concerned that these gaps can lead to serious consequences. The sudden arrival of these lower cost goods has sounded red flags across the US about possible quality failures or disregard for compliance with domestic law.
Helen Dickinson, Chief Executive of the British Retail Consortium, underlined the dire circumstances that make this review necessary. She added: “The review is even more timely now, due to the increased flow of products that may not comply coming on to the UK market.” Other captains of the industry agree with this sentiment. They argue that the foreign system lets foreign firms inundate our markets with cheap products while avoiding the rules and standards local companies have to comply with.
The oversight over this “de minimis” rule has reached a boiling point. This move comes on the heels of former US President Donald Trump’s removal of a comparable policy in the US that exempted goods under $800 from duties. Once again, observers are beginning to anticipate a pervasive shift in policy that could be coming to the UK. This is most especially true given the worldwide trend towards more restrictive trade regulations.
“Everyone should pay their tax… so if there’s a loophole here which means that’s not happening then that needs to be closed so it’s a level playing field for everybody.” – Simon Roberts
FTA policy director Tina McKenzie noted that 16% of goods transported by micro firms are under the £135 threshold. She argued that amending this measure could significantly impact trading conditions and the rate of inflation in the UK retail market.
Former “Dragon’s Den” star Theo Paphitis expressed outrage at what it would mean for small businesses. Additionally, he cautioned that the proposed measure puts the viability of UK High Streets at risk. Like him, many American workers share this concern—afraid that without accountability to harmful foreign competition, domestic retail will be sunk.
In a further encouraging sign for the review, CEO of TSB Alex Baldock recently backed action to redress the balance. He stated that it is essential for the government to commit to “reviewing the low-value shipment loophole,” ensuring fairness between British and overseas retailers.
As discussions unfold, there is a growing consensus that revisiting the “de minimis” rule is necessary to maintain a competitive marketplace. Chinese retailers are deeply engaged in a value pricing blood bath. Perhaps most importantly, they are engaged and watching for new regulatory developments.
“It’s right to be concerned about potential future dumping of goods, as escalating tariffs applied by bigger global blocs against each other may mean a surge in goods arriving in markets like our own.” – she