Zara boss calls for crackdown on fast-fashion tax loophole
The head of Zara’s parent company has called for a US-style crackdown on shipments of small goods in Europe to “level the playing field” between Chinese and European firms.
Chinese giants Shein and Temu have heavily disrupted the global fashion market in the last few years, putting pressure on older companies.
Part of their meteoric rise has been a reliance on a tax loophole called ‘de minimis’, which allows packages of small goods to be imported free from customs duty.
More than 30 per cent of the shipments to America using the ‘de minimus’ rule last year were from Shein and Temu.
“What we have been asking for is a level playing field… in order to have the same set of rules for any single for any single competitors,” Oscar Garcia Maceiras told the BBC.
On 2 April, Trump closed the loophole for goods shipped directly from China and Hong Kong, and the UK has put the policy under review.
Zara boss joins chorus of voices
Maceiras isn’t the only retail boss to call for the end of the tax loophole.
George Weston, CEO of Primark’s parent company Associated British Foods, has said ending the loophole would be a “positive step” for British businesses.
Sainsbury’s CEO Simon Roberts also urged the UK government to close the loophole as soon as possible to avoid the risk of lower quality goods being rerouted from the United States to Europe as a result of President Donald Trump’s tariffs.
Currys chief executive Alex Baldock told the Financial Times that there were already signs of “stock being diverted into European markets in a straightforward dumping way”.
“The single biggest area where lots of stock is likely to land in the UK — at least in my world — is from the likes of Shein, Temu, Alibaba, TikTok shop, and most of all, Amazon marketplace, [which have a lot of Chinese vendors],” Baldock added.
Morning Wire has contacted the Treasury for comment