A woman stands with coffee and looks at her phone on UK High Street.
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British retailers have warned that Chinese companies were likely to flood low-cost goods in the United Kingdom while the prices of US President Donald Trump is accessing the world's largest consumer market.
The British Retail Consortium said that national companies had made the alarm about cheaper “redirected” goods far from the United States and to other markets following 145% Trump prices on China, as well as the closure of a key tax vacuum for low-cost imports.
“Retailers are very concerned about the risk that certain lower quality goods be released from the United States to Europe due to prices,” said Helen Dickinson, director general of the BRC, in a press release.
Analysts reported that the risk was particularly pronounced in Chinese producers sold via online markets such as Amazon, Shein and Temu.
“The tastes of Shein and Temu, I suppose that there is a risk that they choose to direct exports to Europe far from the United States and that prices, in particular for retailers at reduced prices at the lower end,” said Richard Chamberlain, head of research in discretionary consumption actions on Monday.
Chamberlain added that this could strike British and European companies at a lower cost like the Primark clothing giant and the B&M household items store. Primark refused to comment on the issue, while B&M did not immediately answer the request for CNBC comments.
Earlier this month, President Trump signed an executive decree ending a “minimis” tax escape almost centenary for imports of a value of up to $ 800, in a move for the rapid growth of Chinese retailers at low cost such as Shein and TEMU.
From now on, British retailers ask the British government to follow the step for its own tax exemption on imports of a value of up to £ 135 ($ 178).
“In the light of current geopolitical tensions, the government should examine the minimis rules to ensure the best results for British retailers and their customers,” said Dickinson de BRC.
Andrew Goodacre, CEO of the British Independent Retailers Association (BIRA), told CNBC that before the announcement of the tariff, member companies had raised concerns concerning the volume of articles coming to the country of Chinese companies and calling at the end of the free import threshold.
“For many months, we have been asking the government to examine current duties,” said Goodacre by e-mail. “Billions of products each year are sold in major markets, entering the country's franchise country and also avoiding VAT obligations.”
“The thought of Chinese companies throwing even more goods through these channels, a real possibility, is a concern for the big and small retailers,” he continued.
“While customers will see lower prices, he will establish an unjust market leaving brick and mortar stores in an even greater disadvantage than normal.”
However, Chamberlain suggested that the ability of Chinese companies to flood other markets could be limited, because the additional cost of sales in the United States increases their costs at all levels.
“These Chinese e-tailers are faced with full-fledged cost increases, in particular with changes in minimis rules that should make them pay for import rights to exports to the United States so that they should increase prices worldwide,” he noted.
