The EU will consider eliminating the tax exemption that benefits Shein and Temu

The European Union is working on a proposal to impose import tariffs on cheap goods bought on online platforms outside the bloc, a move that would mainly target Chinese retailers such as Temu, AliExpress and Shein, according to people familiar with the matter.

The EU currently has a duty-free threshold of 150 euros ($161) for online purchases intended for small gifts or personal packages, but that has allowed a surge in small-value imports from those platforms, said the people, who spoke on condition of anonymity.

The proposal would aim to stem this flow and would apply to all non-EU e-commerce platforms, they added. The plan was first reported by the Financial Times.

European Commission spokespeople did not immediately respond to a request for comment.

While it remains to be seen whether there is consensus among member states to take action, the move adds to a growing protectionist push against Chinese companies as their cheaper products threaten local producers. This month, the EU will introduce provisional tariffs of up to 38% on Chinese electric vehicles.

In the United States, which has a similar tax exemption for low-value personal packages, there are several bills before Congress that would close or reduce what is known as the de minimis threshold.

Still, inflation in the United States and Europe means there is substantial consumer demand for the cheap goods sold by platforms such as PDD Holdings Inc's Temu and those operated by Alibaba Group Holding Ltd. Shein's rise has taken market share from European clothing retailers such as Hennes & Mauritz AB and Inditex's Zara, while Amazon plans to launch its own low-cost online store.