Trump’s Tariffs Prompt Chinese E-Commerce Giants to Expand Beyond U.S.
By Bao Yunhong, Lv Yating and Denise Jia
Facing rising trade barriers and regulatory scrutiny in the United States and Europe, Chinese cross-border e-commerce platforms are scrambling to diversify their markets and reduce reliance on any single region.
On Feb. 1, U.S. President Donald Trump signed an executive order imposing a 10% tariff on all Chinese imports and ending duty-free treatment for small parcels from China. The U.S. Customs and Border Protection agency enforced the order on Feb. 3, requiring all Chinese goods, including those from Hong Kong, to be formally declared and taxed.
This abrupt policy change has sent shockwaves through the cross-border e-commerce sector, particularly affecting Chinese platforms that rely heavily on small parcel shipments to the U.S. Companies such as Temu and Shein are accelerating their expansion into European markets to mitigate risks. Similarly, TikTok Shop is intensifying its merchant recruitment efforts in the United Kingdom and has launched operations in Spain and Ireland.
Alibaba Group Holding Ltd. has also been proactive in Europe. In December 2022, it launched a new platform, Miravia, in Spain. By 2024, Alibaba’s cross-border platform, AliExpress, secured sponsorship of the European Championship, signaling its commitment to the European market. Alibaba’s logistics arm, Cainiao, has established a strong presence in Spain since 2021, operating a courier network covering 46 provinces and offering next-day delivery across Spain and Portugal.
Shein, the fast fashion seller, has established Poland as its regional distribution hub, leasing 600,000 square meters of warehouse space in 2023 and absorbing virtually all newly built storage facilities in western Poland. Other Chinese cross-border platforms have also expanded warehouse networks across Europe to streamline operations.
While the U.S. remains Shein’s largest market, its recent growth has been driven largely by Europe. “Europe is not a single unified market, and its requirements are high, making it less appealing than the U.S. But in terms of average order value, it is still very attractive,” an industry insider told Caixin.
Europe is one of the few markets with purchasing power comparable to the U.S. A report by Ecommerce Europe projected 958 billion euros ($1 trillion) in online sales in 2024, an 8% year-on-year increase. The European Union’s 27 member states have a combined population of 740 million, and Western Europe, which accounts for 64% of total e-commerce sales, has a per capita GDP of approximately $52,000, indicating strong purchasing power.
However, penetrating the European market presents challenges. Success hinges on capturing the big five markets: the U.K., France, Germany, Spain and Italy. Spain, with its relatively lower economic standing, has a high penetration of Chinese goods, a trend now emerging in France. Industry experts note that European consumers are becoming increasingly price-sensitive, with markets like Spain showing a growing preference for discounts and competitive pricing, said Zhan Qing, manager at Mimacro, a Madrid-based provider of warehousing, logistics and after-sales services for Chinese cross-border businesses in Europe.
Navigating Europe’s regulatory landscape requires meticulous attention to compliance. The region enforces stringent standards on taxation, data security, privacy, product certification and environmental regulations, including the Extended Producer Responsibility directives, said Chen Jiao, director at CJT Global, a cross-border compliance service provider.
Each country maintains its own legal framework, necessitating tailored approaches for market entry, including obtaining specific VAT registrations and adhering to country-specific packaging laws, an industry insider told Caixin. Marketing strategies must also be tailored to each country, adding to costs, the insider said.
Toy and food products face particularly strict environmental and safety certification requirements in Europe, Zhan added.
Regulatory scrutiny in Europe is also increasing. The EU’s 2022 Digital Services Act imposes stricter oversight on Very Large Online Platforms, defined as those with more than 45 million monthly active users in Europe. Companies such as AliExpress, TikTok, Shein and Temu are classed under this category, imposing additional compliance obligations on them, including annual risk assessments and responsibility for removing illegal content and counterfeit goods.
In late 2024, the European Commission initiated investigations into Temu and Shein for potential violations of EU consumer protection laws, including allegations of selling illegal products and employing manipulative marketing practices.
In addition, the Commission is addressing concerns over the influx of low-value goods (under 150 euros) from non-EU online retailers. In 2024, approximately 4.6 billion such parcels entered the EU, double the previous year. This surge raised alarms about product safety, unfair competition against EU-based sellers and environmental impacts. Consequently, the Commission is considering reforms, including the elimination of duty exemptions for low-value parcels and the introduction of handling fees to manage the deluge of small packages.
Contact reporter Denise Jia (huijuanjia@caixin.com)
caixinglobal.com is the English-language online news portal of Chinese financial and business news media group Caixin. Global Neighbours is authorized to reprint this article.
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