British retailers are sounding the alarm over the risk of Chinese imports flooding the UK market following new tariffs imposed by US President Donald Trump. The tariffs, which include a 145% levy on Chinese imports and the closure of a long-standing tax loophole, are expected to push low-cost goods away from the US and into alternative markets, including the UK and Europe.
The British Retail Consortium (BRC) has warned that the inflow of cheap goods, especially from online platforms like Shein, Temu, and Amazon Marketplace, could disrupt the domestic retail sector, pressuring prices and intensifying competition for local discount chains and independent stores.
Retailers and Analysts Raise Concerns Over Market Distortion
“Retailers are very concerned about the risk of some lower quality goods being rerouted from the US to Europe as a result of the tariffs,” said Helen Dickinson, Chief Executive of the BRC.
RBC’s Head of European Consumer Discretionary Equity Research, Richard Chamberlain, told CNBC that Chinese companies might redirect their exports to Europe, adding pressure to UK discount retailers such as Primark and B&M. While Primark declined to comment, B&M did not respond to requests for comment.
Chamberlain added that this redirection could particularly strain smaller retailers already facing tight margins. “There is a risk that the likes of Shein and Temu shift supply to Europe, undermining local pricing models,” he said.
Retail Groups Call for UK Tax Reform on Imports
In response, UK trade bodies are now urging the government to abolish its current import tax exemption on goods valued up to £135. This threshold mirrors the US’s now-defunct “de minimis” rule, which allowed tax-free entry of goods under $800.
“The government should review the de minimis rules to ensure the best outcomes for UK retailers and their customers,” Dickinson said.
Andrew Goodacre, CEO of the British Independent Retailers Association (BIRA), echoed this call, saying that members have long flagged the flood of duty-free Chinese goods entering the UK. “Billions of products every year are sold through large marketplaces, entering the country duty-free and avoiding VAT,” he told CNBC.
Goodacre warned that without regulatory change, “the thought of Chinese companies dumping even more goods through these channels is a real concern for large and small retailers. It creates an unfair marketplace and puts bricks-and-mortar stores at an even greater disadvantage.”
Global Pricing Pressure May Limit Impact
Despite concerns, Chamberlain noted that rising global costs could limit China’s ability to shift its low-cost goods to other markets at scale. “Chinese e-tailers are facing higher costs, especially with the loss of the US de minimis exemption. That may force them to raise prices globally, which could reduce the pressure somewhat,” he said.
Still, UK retailers continue to push for a more level playing field, as competition intensifies in an already strained retail environment.
