Highlights
- The international delivery company Parcelhero says that the UK may need to follow the US in scrapping its de minimis limit
- Since Trump's tariffs, UK direct imports of low-value Chinese products have increased 53%
- £5.9bn of cheap products are now flooding into the UK annually, by-passing and further threatening Britain’s retailers
Following President Trump’s long-planned ending of duty-free de minimis packages from China into the USA, the UK has seen spiralling imports of low-value goods as Chinese retailers seek out new markets.
In the financial year ending April 2025, new HMRC data has revealed that the trade value of de minimis imports of £135 or less was £5.9bn – up 53 per cent from the previous year. The reason for this boom in the import of cheap goods is easy to identify, says Parcelhero.
"Even before he took office, President Trump announced his intention of scrapping the US $800 (around £600) de minimis limit on all items arriving from China and Hong Kong," said Parcelhero’s Head of Consumer Research, David Jinks, a Member of the Chartered Institute of Logistics and Transport. "His first attempt ended in Customs chaos back in February, but he finally succeeded in his plan on 2 May. Long before then, however, many Chinese manufacturers and traders had seen the writing on the wall and were targeting other lucrative markets such as the UK.
"The result is that Britain has been engulfed in a tsunami of low-cost goods usually imported directly from Chinese sellers. The value of these imports rose from £3.9bn in 2023/4 to £5.9bn in 2024/5. Put simply, it can be claimed that £5.9bn has effectively been taken from the UK economy and the High Street’s cash tills.
"America’s unilateral ending of its de minimis threshold has destabilised the international market and may have made our own limit untenable. In particular, British clothing manufacturers and retailers are calling for a level playing field to prevent Chinese firms from flooding online marketplaces with low-cost items. They argue international marketplaces such as Shein and Temu currently have an unfair advantage. Just last week, Shein revealed that sales to UK shoppers had soared by a third last year to hit £2bn, pushing its profits up by 57 per cent compared to 2023.
"The European Union (EU) has already announced its de minimis of €150 (around £130) is set to be withdrawn in 2028 and is debating a €2 blanket fee (or similar alternative) on every package arriving in the EU. Many UK analysts believe that Chancellor Reeves should take similar steps in her forthcoming Autumn Budget. Indeed, Sky News research has found that if a 20 per cent Customs fee were introduced on all goods currently qualifying for zero duties it could generate over £1b in new revenues.
"Back in April, Chancellor Reeves announced that the UK Government would review the UK’s low-value items exemption. In the light of ballooning de minimis imports, this review may need to be brought forward. Simply matching the EU’s 2028 deadline could leave UK retailers exposed to an exponential increase in low-value imports for three years longer than necessary."
However, Jinks qualifies the case for abolishing de minimis, citing some second-order effects that might actually damage the UK economy.
"If the UK were to scrap de minimis tariff legislation tomorrow, that wouldn’t necessarily mean the Government would receive £1bn in extra tariffs or that shoppers would spend £5.9bn on UK-sourced goods," he explains. "It’s more likely that UK consumers would change their shopping behaviour, cutting back on low-value items or looking at alternatives."
Although that would arguably keep more money in the UK instead of in China, Jinks adds that there are many British small traders who source their products from China, "and these would be negatively impacted by the imposition of duties. The Federation of Small Businesses has urged the Government to proceed with caution as 16 per cent of goods moved by UK small firms sit below the £135 threshold," he says, outlining the biggest objection – that prices would rise for UK shoppers, with typically lower-income families, who tend to purchase more low-value items online, suffering disproportionately.
"From a logistics point of view, the ending of this exemption could also lead to increased checks on packages arriving in the UK from overseas, causing delays. One final potential argument against the UK scrapping de minimis is the reason why it exists in the first place: it traditionally has cost more to collect the duty on low-value packages than it earns. In other words, we could end up spending £1 to collect 50p."
Notwithstanding these arguments, Jinks concludes that the price of not scrapping the UK de minimis limit remains likely to be higher than doing it: "It’s no coincidence that companies such as Claire’s Accessories UK have fallen into administration at this time. Having to compete with a surge in low-value goods from China could spell disaster for many other UK companies if it is allowed to continue for long.
‘It’s clear that physical stores are struggling against the likes of Shein and Temu. In order for them to survive, UK retailers need to see an end to cheap de minimis imports and to further develop their own omnichannel approach, embracing both online and physical store sales," Jinks concluded.