The global trade landscape is undergoing a dramatic rewiring, with one of the most visible shifts being the redirection of China's vast export machine away from the United States and towards Europe. This seismic change, fueled by former President Donald Trump's aggressive tariff policies, has unleashed a flood of low-cost packages into European backyards, warehouses, and airports, creating what industry players are calling a modern 'Silk Road'. For the first time, the European Union has surpassed the US as the largest market for China's $100 billion stream of cheap parcels.
The New Silk Road: Cargo Planes and Backyard Sheds
At the heart of this redirection is a sprawling, often shadowy logistics network. Take Xue Er, a stay-at-home mom who moved from Shanghai to the UK in 2021. She recently built a 320-square-foot shed in her backyard to store clothes, bags, and small furniture from Chinese merchants. Acting as a micro-fulfillment center, she packs and ships orders for a cut, earning between £3,000 to £5,000 in a good month. Her setup is a tiny node in a vast system that has helped power China's trade surplus past $1 trillion this year.
This network is powered from the skies by upstart cargo airlines. Entrepreneurs like Abdulaziz Abdurakhmanov, a 36-year-old from Uzbekistan, are key players. His company, My Freighter, launched in 2023 and now runs 200 flights monthly between China and Europe, carrying over 8,000 tons of mostly e-commerce packages. "We are at our maximum capacity, Alhamdulillah," he said. Their route mirrors the ancient Silk Road, running from China through Central Asia to Europe.
The trigger for this shift was the closure of a crucial US customs loophole. Since May, Chinese packages valued under $800 have become subject to US tariffs, leading to a more than 40% drop in low-value exports to America. In contrast, the EU's de minimis threshold of €150 and the UK's £135 limit have made these markets suddenly far more attractive. Shipments have quadrupled to Hungary and Denmark, and risen 50% or more to Germany, France, and the UK.
European Consumers Embrace the Bargains, Despite Controversies
European consumers, grappling with years of stagnant growth and inflation, are enthusiastic buyers. Platforms like Temu, Shein, and Joybuy are rolling out aggressive promotions and leveraging social media influencers to fuel demand. Zoe Giles, a 34-year-old mother in Kent, England, orders 25 to 30 items each month from these sites. "It's cheap and convenient. It has stuff that I can't get elsewhere," she says, acknowledging that quality can be hit-or-miss.
However, this boom has not been without significant controversy. Shein's attempt to establish a physical presence in Paris's historic BHV Marais department store in November sparked protests from French retailers accusing it of unfair competition and environmental harm. The launch devolved into chaos after French authorities moved to suspend Shein's online platform for listing items like child sex dolls and brass knuckles, leading to a legal probe.
More broadly, European consumer groups have raised alarms about product safety. An investigation this year found that 70% of over 100 items tested from Shein and Temu did not comply with EU regulations. Hazards included toys with choking risks, toxic substances, and USB chargers that overheated dangerously.
Regulatory Backlash and an Uncertain Future
The influx is prompting a regulatory fightback. The European Union, galvanized by the Shein scandal and pressure from its retail industry which employs 30 million people, has agreed to impose a €3 fee on imported small packages starting July 2025, before closing the de minimis loophole entirely in 2028. The UK plans similar measures, but not until 2029.
European businesses feel the heat. "We sell at a price point of around 15 euros a pair of underwear, where Shein and other Chinese platforms will sell five pairs for the same price," said Guillaume Gibault, founder of French brand Le Slip. The economic threat is real, but stemming the tide of cheap goods may prove difficult given entrenched consumer habits and the sophisticated logistics now in place.
As Chinese e-commerce giants pivot their focus, the data tells a clear story: Temu has seen seven straight months of double-digit sales declines in the US, while its sales have jumped 56% in the EU and 46% in the UK since May. The trade war started by Trump has irrevocably altered global commerce routes, and Europe is now squarely in the path of the resulting deluge of cheap packages, facing the complex consequences of becoming China's new bargain basement.
