Chancellor Rachel Reeves has pledged to review a controversial tax loophole that allows low-value goods from Chinese e-commerce giants such as Shein and Temu to enter the UK without paying customs duties—a move aimed at protecting British retailers from unfair competition and goods being “dumped” on the high street.
The scheme, known as the “de minimis” rule, currently exempts imports valued at £135 or less from customs duty. The loophole has come under mounting criticism from UK retail leaders, including those at Next, Sainsbury’s, Primark and Currys, who say it creates a lopsided playing field and threatens the integrity of domestic retail and supply chains.
Following a similar pledge by President Donald Trump to eliminate the US equivalent of the scheme—under which goods under $800 enter America without duties or detailed inspections—Reeves confirmed she would act to “stop the dumping of cheap goods into the UK” and support British businesses as part of her “plan for change”.
Speaking at the IMF and World Bank Group spring meetings in Washington, the chancellor said, “The world has changed, and we are in a new era of global trade. The government is standing up for the British high street against the dumping of cheap imports that undercut retailers and the high street.”
The Treasury said it had tasked the Trade Remedies Authority with accelerating its work in this area, including enhanced surveillance, faster data gathering, and quicker responses to import surges. Consultations with businesses are due to begin next month as part of the formal review process.
British retailers welcomed the decision as a long-overdue correction to what they view as an exploitative regime. Helen Dickinson, chief executive of the British Retail Consortium (BRC), said it showed the government was “prepared to take swift action to protect consumers from goods being dumped in the UK—many of which fail to meet UK environmental and ethical standards.”
George Weston, CEO of Associated British Foods, which owns Primark, called the planned reform “a significant step forward” in backing domestic business, while Currys chief executive Alex Baldock described it as “encouraging”.
“There is a growing risk of unsafe and tax-dodging products being dumped in the UK,” said Baldock. “All retailers selling to UK consumers should play by the same rules. If you want to sell to UK consumers, then abide by UK standards, and pay UK tax, just as UK retailers do.”
However, not all stakeholders are celebrating. Major logistics providers including Royal Mail, DHL Express and Evri have warned that removing the de minimis threshold could increase costs and cause delays at the UK border, ultimately leading to higher prices for consumers.
Chinese fast fashion giant Shein responded diplomatically to the review. A spokesperson said the retailer “welcomes the opportunity to work with policymakers and industry peers to review the current de minimis framework and ensure a level playing field for all retailers.” She added that Shein’s business success was driven not by tax breaks, but by its agile supply chain and on-demand model, which allow the company to offer “affordable prices” to customers around the world.
The review signals a broader shift in the UK’s approach to trade enforcement and fair competition, reflecting growing global concerns about the influx of low-cost imports and the uneven impact they can have on local economies and tax bases. With both Washington and Brussels moving to tighten loopholes, the UK’s retail and manufacturing sectors will be watching closely to see whether Reeves delivers on her promise to rebalance the rules.
Read more:
Rachel Reeves to review import tax loophole in crackdown on cheap Chinese goods
