France Fines Shein, Temu €19.50 Per Item

France has started imposing fees on fast fashion items sold by e-commerce sites such as Shein and Temu. The fees range from €0.25 for a pair of boxer shorts or socks to €12 for a coat, with the amount capped at 50% of the product's pre-tax sales price.

The fees will be managed by the association Refashion and will increase further from 2030. The per-item fee will vary on a set scale according to how each product scores on the volume of clothing placed on the market and the cost of repairing garments relative to their purchase price.

Shein's product selection included more than 2 million items as of March 31 this year, with 4,700 new apparel styles each day. The company was valued at $26.3 billion in its initial public offering in Hong Kong.

China's commerce ministry has described the French law as discriminatory and a trade barrier, saying it could violate World Trade Organization (WTO) principles. The fees will not apply to retailers such as H&M or Zara.

## Why it matters The French law aims to address environmental concerns from overproduction and curb sales of cheap clothing. The harmful effects of ultra-fast fashion on the environment and the economy are well known and documented. The levy is part of a push to rein in Asian e-commerce giants, including Shein, Temu, and AliExpress, which have exploded in popularity in France in recent years.

The fees could have a significant impact on the fast fashion industry, with the potential to reach up to €19.50 per item by 2030. This could lead to a surge in prices for consumers and a decline in sales for companies like Shein and Temu. The French government's move is seen as a crackdown on ultra-fast fashion, and it remains to be seen how the industry will respond to the new fees.

## What happens next The French government will continue to monitor the impact of the fees and adjust them as needed. The association Refashion will be responsible for managing the fees and ensuring that companies comply with the new regulations. The WTO will also be watching the situation closely, as China's commerce ministry has raised concerns about the law being discriminatory and a trade barrier.

The outcome of this move will have significant implications for the fast fashion industry, and it remains to be seen how companies like Shein and Temu will adapt to the new fees. The French government's efforts to curb sales of cheap clothing and address environmental concerns will be closely watched by other countries, and it could potentially lead to a shift in the way the fast fashion industry operates.