What: Chinese textile and clothing exports to Europe have surged as US tariffs force manufacturers to redirect goods, intensifying price competition and prompting regulatory action in the EU.

Why it is important: The situation demonstrates the interconnectedness of international trade, with policy changes in one region triggering profound effects on retail dynamics elsewhere.

In 2025, Chinese textile and clothing exports to Europe have risen sharply, with a 20% increase in both value and volume, as manufacturers reroute goods away from the US in response to heavy tariffs. This trade diversion has led to a €2 billion surge in low-cost clothing imports, intensifying price competition for European brands and prompting concerns about market disruption. The shift is closely tied to the US elimination of the de minimis exemption, which forced e-commerce giants Shein and Temu to pivot their focus to Europe, highlighting the vulnerability of cross-border retail models to regulatory changes. The EU has responded by introducing a €2 fee on low-value parcels and considering the removal of the €150 duty-free threshold, aiming to manage the influx of Chinese shipments and protect local retailers. These developments underscore how global trade policy shifts can rapidly reshape supply chains, competitive dynamics, and regulatory priorities across the retail sector.

IADS Notes: Chinese exports to Europe surged by 20% in early 2025 as US tariffs redirected trade flows, intensifying price competition and prompting the EU to introduce a €2 parcel fee and consider abolishing the €150 duty-free threshold (Financial Times, October 2025; Inside Retail, May 2025; Journal du Net, April 2025). The shift is linked to the US closing the de minimis exemption, forcing Shein and Temu to focus on Europe (Financial Times, June 2025). This has accelerated innovation and regulatory reform in the European retail sector, as local brands adapt to heightened competition from Chinese e-commerce platforms (GDI, August 2025).

China reroutes clothes exports to Europe after US tariffs upset trade