The European Union is planning major changes to its customs regulations for online marketplaces like Amazon (AMZN), PDD Holdings’ (PDD) Temu, and a privately held platform, Shein. These reforms would make online platforms responsible for product safety and compliance, instead of individual consumers, the Financial Times reported.
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The potential change comes amid growing concerns about the rise of fake and unsafe goods imported from Asia. Generally, these goods are sold directly to European consumers through online platforms.
Online Platforms to Take Charge of EU Import Compliance
Currently, consumers are responsible for ensuring that goods bought from these online platforms comply with EU regulations. However, under the proposed reforms, online platforms would take on this responsibility and provide authorities with information about the goods before they arrive in the EU. These platforms will also collect import duties, Value Added Tax (VAT), and ensure products meet safety and quality standards.
To streamline this process, the EU plans to set up the European Union Customs Authority (EUCA) and create a shared data network across all member states. This will allow authorities to track and inspect incoming shipments, identify potential risks, and prevent unsafe or illegal goods from entering the European market.
While the proposed reforms are still under consideration, they are expected to impact online retailers in the EU. These platforms will need to adapt their business models to comply with these new regulations, potentially facing higher compliance costs and new liabilities.
Trump to Make Things Tough for Shein and Temu
Besides for the EU, Shein and Temu are facing troubles in the U.S. as well. President Donald Trump is working to close a trade rule that allowed these Chinese companies to compete with Amazon. Earlier, smaller packages valued under $800 were allowed to enter the U.S. without tariffs. By using this exemption, Temu and Shein were able to offer cheaper products to U.S. consumers.
However, under Trump’s new trade policies, substantial tariffs have been imposed on imports from China, Canada, and Mexico, ranging from 10% to 25%. This eliminated the exemption for small packages. This move is expected to impact the growth of these Chinese e-commerce giants.
Which Stock Is a Better Buy, AMZN or PDD?
Turning to Wall Street, analysts are optimistic about Amazon’s share price, projecting a 9.57% upside potential. AMZN stock has a consensus Strong Buy rating from 41 analysts, including 40 Buys. Meanwhile, PDD with a Moderate Buy consensus rating, based on six Buys, four Holds, and one Sell rating, shows a higher growth potential of 20.37%.
