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Chancellor Rachel Reeves is considering ending the Low Value Import scheme, which currently allows online retailers to bring goods worth up to £135 into the country without paying customs duties.
The move comes as the UK prepares for an influx of Chinese companies dumping stock for cheap as a result of the US-China trade war.
Reeves announced this review of the scheme in response to concerns raised by major UK retailers, including Next, Currys, and Sainsbury’s.
These companies warned that an increase in cheap Chinese imports could undercut UK businesses, threatening British high street stores. Any potential reform would follow the lead of the US and EU which have both signalled their intention to similar “de minimis” exemptions.
Reeves said: “The world has changed, and we are in a new era of global trade. We must stand up for free and open trade crucial to deliver our Plan for Change to make everyone better off. We must help businesses keep their access to trade around the world. This government is meeting the moment to protect fair and open trade.
“Following recent announcements reducing tariffs and support for the zero-emissions vehicles industry, today’s package will help businesses compete fairly with international exporters, supporting a world economy that provides stability and fairness for working people and businesses alike.”
It comes after Currys CEO Alex Baldock warned that more Chinese products will “flood” the UK and Europe market through platforms like Temu, Shein and Amazon, following Donald Trump’s China tariffs and its effects on US trade.
He highlighted potential safety risks around certain products and criticised “tax dodging” by some Chinese factories that sold in online marketplaces, despite the influx of products possibly leading to lower prices for UK consumers.
