Whilst the long-planned Shein float on the London Stock Exchange continues to be fawned over by the UK government, every retailer of note in the UK has woken up to recognise that trade with China needs to be much more tightly controlled. Where President Trump has acted to highlight the unfairness of the personal imports concession on duty, and has the US Postal Service and Customs & Border Protection Agencies working on a duty collection process, we in the UK should be following.
The EU is understood to be more closely examining its arrangements viz personal import duty concessions, here in the UK the Government is throwing the doors open to a Shein stock market listing without first closing the gap to ensure that competition from Chinese businesses is conducted on the same terms which our own businesses operate by.
Shein’s valuation has already dropped from an estimated £60bn to around £40bn in the wake of the US actions underway towards the closing of the duty loophole. Shein has also, purportedly, ceased its search for a UK distribution centre as clearly the viability of its entire business model is under serious threat – and not before time.
Factor in the ongoing furore over Shein’s alleged ‘blind eye’ when it comes to policing its supply chain over its use of forced labour in the Chinese cotton supply and manufacturing area of Xinjiang. Clearly, if the UK government endorses and the FCA approves, the Shein listing there will be outrage. Not just because of the impact that Shein, Temu and other Chinese businesses are having on our own retail and manufacturing sector but because it will stand as proof of our Government’s abject failure to fully uphold its claims to be in support of human rights and against those who exploit and mistreat minorities.
There is also the matter of the large numbers of UK, EU and US retailers who currently source much of their merchandise from China. They are advised to cast their nets further afield, to near-shore or to re-shore, to wherever it proves possible, as no doubt there will be a punitive response from China if the personal duty concession is removed. Further, if British brands are still importing and having to label products as sourced from China (as many big names currently are) they will find it near impossible to then export those products to other countries without facing much higher tariffs.
Superdry is understood to have ceased shipping products made in China direct to the US to avoid extra tariff costs. Meanwhile Next is exploring the option of forming a US entity to reduce its tariff exposure so that it will pay duties on the cost price of its goods rather than on the selling price. Others are considering their options.
If 2025 achieves nothing more, it can be hoped that – at the very least – we will start to see the introduction of considerably levelled playing fields in international trade, as well as wider recognition that the uncontrolled era of ‘super-cheap’ prices is coming to an end.
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