As Chinese e-commerce platforms rapidly gain users in Latin America, dissatisfaction has arisen among local retail and other industries, which have strongly called for regulation. In response, many Latin American countries have abolished tax exemption measures for small imports. However, Chinese e-commerce companies are responding by strengthening local production and other means, and the effectiveness of tougher customs duties remains unclear.
Nikkei Chinese Edition reported on the 2nd that users of Chinese e-commerce platforms are growing rapidly in Latin America. According to data collected by US research firm Sensor Tower from eight South American countries and Mexico, as of January this year, Temu's monthly active users increased by 80% compared to last year, and SHEIN, which already had a large customer base, also saw a 20% increase.
Looking at Temu's monthly active users, Brazil's grew 2.5 times and Argentina's soared 43-fold. The influx of already low-priced Chinese goods, fueled by tax exemption or reduction, has far exceeded expectations, causing dissatisfaction among local industries in various countries.
On August 15, Mexico increased the import tariff on low-value items worth less than US$50 (RM211) to 33.5%. In January, Mexico had just abolished its small-amount import tax exemption system and imposed a 19% tariff on goods sent from countries that do not have a trade agreement with Mexico.
Chile will also abolish tax exemptions for imported goods worth less than US$41 (RM173), levying a 19% tariff starting in October. Ecuador imposes a fixed tariff of US$20 (RM84) on low-value goods, and Uruguay is also exploring related measures, considering taxing low-cost goods from foreign e-commerce sites (outside the US) that exceed the allowed purchase frequency.
The report points out that another goal of these measures is to stay aligned with the US. In May, the Trump administration canceled tariff exemptions for Chinese small parcels valued at less than US$800 (RM3380).
On July 28, Mexico announced an increase in the tariff rate for small imported goods. Previously, the US imposed an additional 30% tariff on Mexico, effective August 1. However, after this policy announcement, US President Trump delayed the tariff measure by 90 days.
However, the report notes that the effectiveness of tougher taxation remains uncertain. In August 2024, Brazil took the lead among Latin American countries in abolishing the exemption system. SHEIN is responding by increasing cooperation with domestic factories in Brazil and by expanding its e-commerce platform to better match local businesses with consumers.
Sensor Tower data show that, even after the abolition of tax exemptions, SHEIN and Temu users in Brazil continue to grow. According to a Financial Times report on August 26, after the US announced the cancellation of its small-item tax exemption, Temu temporarily suspended exporting and selling goods to the US, but resumed sales in July.