The European Union prepares for battle against unfair competition from China

Chinese products are frequently sold in Europe at prices four to five times lower than those of local competitors. This price disparity stems partly from lower labour and production costs, as well as subsidies from the Chinese government. In contrast, European companies face stringent quality and safety regulations, which Chinese companies often circumvent. This undermines the competitiveness of European — and as the referenced study shows — Belgian businesses. Moreover, Chinese companies benefit from duty exemptions on parcels under €150 and sometimes declare lower import values than what was actually paid for the goods. This creates an uneven playing field, severely harming Belgian retailers.

In addition to financial losses, concerns about product safety and adherence to European standards persist. Limited customs enforcement capacity in Belgium exacerbates the issue, allowing goods with undervalued declarations or substandard compliance to enter the European market. Against this backdrop, the European Commission has proposed new legislation, which prompted the Gazet van Antwerpen to publish an article on the subject. Schippers, who teaches and conducts research on customs law and related topics in the Master’s programme on Indirect Taxes, further explained these developments in the publication.

European Commission's plans

The European Commission has devised a solution to improve oversight of e-commerce shipments starting 1 March 2028. Schippers outlined how this will work: “Under the proposal, e-commerce platforms would themselves be responsible for customs declarations. Currently, third parties such as FedEx or DHL usually handle this process. For instance, if you make a purchase on Alibaba, the platform would, in the future, be required to immediately report the transaction to customs through a central European IT platform while your ordered products are still in China. This data would then be stored in the so-called Customs Hub Data. The e-commerce company would be held accountable for ensuring all import duties are paid and that the products meet European standards.”

Schippers also noted that the Commission intends to abolish the €150 threshold. “At present, customs duties are only levied on products valued above €150. Since many parcels from China are cheaper, these companies often bypass duties. Removing this threshold would eliminate this distortion.” He added that the plan also involves simplifying import tariffs. “There will be five categories with corresponding rates — for instance, 12% on all clothing and 17% on shoes — replacing the thousands of product categories currently in use.”

Are the European Parliament's ambitions for accelerated implementation achievable?

The European Commission aims to introduce the new customs legislation for e-commerce shipments by 1 March 2028, whereas the European Parliament wants to expedite the process and address e-commerce shipments by 1 March 2026. The question is whether this is feasible. Schippers says: "The European Parliament requested this spring for the new regulation to be implemented as early as 1 March 2026. There is a third player involved: the European Council (a key policy-making body of the European Union, ed.)." Schippers explains that the Council intends to start negotiations on the implementation in January 2025. He continues: "The Council is also in favour of this regulation, but I expect they will likely follow the European Commission's timeline, as it always takes time to establish a new IT system. Therefore, I expect the new customs law to come into effect in 2028."

The main question after that is whether the change will have an impact. Schippers believes it will: "Chinese products may also become slightly more expensive in Belgium, as more import duties will need to be paid. Moreover, the European Commission intends to establish the European Customs Authority by 2028. This new authority will have its own mandate, such as assisting in conducting inspections. The European Customs Authority will, for example, be able to collect more information on 'statistical values' via a new European IT system." The associate professor explains that customs will look at the declared value for a particular product, such as five T-shirts, and compare it with the average price of five T-shirts on the European market. "If those values differ significantly, customs officers may select the parcel for additional inspection. The fact that a customs officer has doubts may be enough to reject the declared value of a parcel and assign a new value."

Future outlook

Whether the new rules will create a foolproof system is too soon to say, according to Schippers. "An e-commerce platform will still be able to enter an incorrect value and get away with it." Moreover, Schippers points out that there are not enough customs officers to inspect the millions of parcels from China every day. "But the chances of catching Chinese companies attempting to bypass the rules will increase with the new system. Of course, that doesn't mean the competition from Chinese companies will suddenly become much less intense. The production costs of Chinese companies are simply much lower than those of their Belgian or Dutch competitors", says Schippers.

Recent political developments in the United States could also play a significant role in either prolonging or even worsening the competition issue, according to Schippers. "The elected US president, Donald Trump, has announced he wants to impose a 60% import tariff on all Chinese products. This could mean that far fewer Chinese products will enter the United States, and many more will be shipped to Europe. In the short term, the competition from Chinese products in Belgium could therefore become even more intense."