China's Cheap Goods Are Europe's Problem Now
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What has caused the influx of Chinese goods into Europe?
Over the past year, there's been a huge influx of Chinese goods into the European market. One of the biggest companies selling these goods is Shein, the company famous for fast fashion at low prices. In November, Shein opened its first permanent store in Europe, in a popular department store in Paris. Tell me about what happened when Shein opened a store in Paris.
Chaos, absolute chaos.
How did Shein's opening in Paris create controversy?
That's our colleague Chelsea Delaney. It was chaotic because there were tons of people lining up, eager to shop. And right next to them, angry Parisians who wanted Sheen out of their city.
It was intense. You know, a lot of French retailers and politicians were very upset about it.
What led Chinese companies to pivot from the U.S. to Europe?
Some department store workers held a strike, or held a protest. They went on strike for a day.
Mail down!
Mail down!
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So even just the announcement that this was coming had caused a huge stir in Paris and in France.
The flood of cheap Chinese goods into Europe has been swift. And there is one very specific reason these companies are suddenly so focused there.
After the tariffs went into effect into the U.S., China needed new places to sell all that stuff. It was no longer selling to the U.S., and Europe looked like the perfect place.
How did tariffs and de minimis changes impact Chinese e-commerce?
Welcome to The Journal, our show about money, business, and power. I'm Ryan Knudsen. It's Wednesday, January 7th. coming up on the show, how Europe replaced the US as China's new favorite customer.
For decades, China has been the world's manufacturing floor, and America was its biggest customer.
They make everything. They make clothes. They make vehicles. They make phones. They make laptops.
What logistics challenges do Chinese businesses face in Europe?
There's very little in our lives that we, you know, interact with that does not have a Chinese component to it.
And increasingly, one of the biggest product categories that China makes is known as low-value packages, which is basically anything that's less than a few hundred bucks.
I think it's underappreciated how big a part of China's export sector has become these low-value packages. So in 2024 and also 2025, they've exported about $100 billion of these low-value packages. So it has become really enormous.
Companies like Shein have sold clothes to Americans for low, low prices.
I don't think I've ever had a Shein haul this big before.
I just got all this stuff for literally $0. And Americans love this stuff.
This is like the biggest package I've ever gotten from him before.
How are small businesses benefiting from the new trade routes?
I ordered a bunch of random things from Shein. I honestly don't even remember what I ordered. And it was only like 60 bucks, which is pretty good because I got, I want to say, 20 things.
But the Trump administration did two things last year that really rocked the boat for the Chinese e-commerce industry. First, Trump announced he was going to close something called de minimis. De minimis is a regulatory loophole that allowed packages under $800 to be exempt from customs duties and certain taxes.
It just made it very easy to ship small packages from a place like China into the U.S. because you avoided all of the hassle and the bureaucracy that comes with bigger shipments. So that's what a lot of the Chinese e-commerce companies did. So instead of sending a bulk shipment through it with a container full of, you know, a thousand shirts, they'd send a small package through the mail and then they wouldn't have to do all of the customs declarations and pay the taxes.
What controversies have emerged from the rise of Chinese goods in Europe?
A lot of American companies complain that De Minimis gave foreign manufacturers, companies like Sheen and Timu, unfair advantages.
De Minimis is a big deal. It's a big scam going on against our country, against really small businesses. And we've ended it. We've put an end to it.
The second thing, of course, was tariffs, which reached such high numbers with China last year that it made it much less profitable for some Chinese companies to do business in the U.S., The end of de minimis and the application of high tariffs on China signaled a major obstacle for Chinese companies, who thrived by selling low-value packages.
People thought it would be really bad for Chinese manufacturers.
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Chapters
8 chapters
1
What has caused the influx of Chinese goods into Europe?
0:05–0:35
2
How did Shein's opening in Paris create controversy?
0:35–0:54
3
What led Chinese companies to pivot from the U.S. to Europe?
0:54–1:39
4
How did tariffs and de minimis changes impact Chinese e-commerce?
1:39–2:28
5
What logistics challenges do Chinese businesses face in Europe?
2:28–3:16
6
How are small businesses benefiting from the new trade routes?
3:16–4:14
7
What controversies have emerged from the rise of Chinese goods in Europe?
4:14–5:02
8
How might European regulations affect the future of Chinese e-commerce?
5:02–19:05