Discriminatory by Design: France's Anti-Fast-Fashion Law Zeroes In on China

France's National Assembly has passed the "Anti-Ultra-Fast-Fashion Law." The legislation aims to curb the flood of low-cost clothing into the French market. In practice, it primarily targets Chinese cross-border e-commerce platforms such as Shein, Temu (Pinduoduo's cross-border e-commerce brand) and AliExpress.

France's new law targets Chinese low-cost clothing platforms like Shein.

However, European homegrown fast-fashion giants like Zara and H&M are exempted.

China's Ministry of Commerce has lodged a formal protest, saying the law violates the World Trade Organization's non-discrimination principle and constitutes a trade barrier. Beijing has warned it will retaliate if necessary.

Commerce Ministry blasts discriminatory curbs, vows countermeasures if Chinese firms' rights are violated.

Under the law, a fine of between €0.25 and €6 will be imposed on each qualifying item starting in 2026. That fine rises to as much as €10 per item by 2030. France's National Assembly additionally passed a government amendment that toughened the penalties further. The amendment raises the maximum per-item fine in 2030 to €20, while capping total fines at 50 percent of a product's pre-tax price.

Separately, the European Union formally scrapped the customs exemption for parcels valued under €150 starting July 1. It now imposes a flat €3 duty on every low-value parcel shipped directly from outside the bloc. Together, these two policies have created unprecedented barriers for Chinese cross-border e-commerce platforms entering overseas markets.

A Ministry of Commerce spokesperson criticized France for adopting discriminatory restrictions. The spokesperson said the legislation seriously distorts fair competition, and China views the matter with grave concern.

The law is framed under the guise of "environmental" and "sustainability" standards, but in effect it is an exclusionary measure that may breach WTO non-discrimination rules. It already constitutes a trade barrier against China, a stark departure from the fair competition and free trade principles France claims to champion.

This, the spokesperson added, would harm not only the legitimate rights of Chinese companies but also French consumers' own interests.

China has urged France to immediately correct its discriminatory practices. Beijing says it will closely monitor how the implementing rules are drafted and enforced. It will take necessary countermeasures should the legitimate rights of Chinese firms be infringed.

Three Thresholds, One Clear Target

The law sets out three thresholds for products. Platforms fall under strict regulation if they launch more than 15,000 new styles a year on the EU market, sell items averaging below €5, or offer products with an expected lifespan of fewer than 30 washes. Meeting any single criterion is enough to trigger the rules. Critics say this framework appears "tailor-made" for Shein, Temu and AliExpress.

France's law looks "tailor-made" to target platforms like Temu, critics say.

France's Minister for Small and Medium-sized Enterprises and Commerce, Serge Papin, said bluntly that the law targets the fast-fashion industry's major players. He explicitly named Shein, Temu and AliExpress, singling out their business model based on stockpiling and constant turnover.

According to China News Weekly, Shein, Temu and other Chinese cross-border platforms have reshaped France's fashion market since entering the country. They have done so by riding on rock-bottom prices and a relentless pace of new arrivals. Public data show these platforms now account for 6 percent of total apparel purchases in France. Shein ranks among the country's top five clothing brands by sales.

In terms of consumer behavior, ultra-fast fashion and second-hand resale together make up a quarter of the French apparel market. Some 38 percent of French consumers have tried a Chinese cross-border platform. That figure rises to 56 percent among women aged 16 to 24.

Liu Beibei is head of overseas business at Dongguan Tongfa Knitting, a long-time contract manufacturer for European clothing brands specializing in mid-to-high-end garments. She said overseas clients have asked her why other companies' wool products are sold so cheaply after spotting the low prices on fast-fashion platforms.

Liu admits the cross-border platforms have dealt a heavy blow to Europe's fashion industry.

Using wool products as an example, she notes that the source of the wool, farming methods and spinning techniques all affect final costs. A 100 percent wool sweater can sell for as little as €40 or as much as €200, but there is a big difference in craftsmanship and quality. "There's a lot  beneath the surface," she says. She believes younger consumers' preferences are shifting toward platforms offering faster new arrivals and lower prices.

A "Tiered Eco-Fine" at the Core

Reports indicate the scheme's core mechanism is a "tiered eco-fine." In 2026, fines of €0.25 to €12 will apply per item. That maximum rises to €20 per item by 2030, capped at half the product's price. This means a dress selling for €5 could face a fine of up to €2.50. On top of the EU's flat €3 duty per parcel, this would push up costs for consumers substantially.

Media calculations suggest a T-shirt selling for €10 online costs €3.50 to manufacture. Add €2 for air freight, €1.50 in import VAT, €2.50 for last-mile delivery and €1 in platform commission. That leaves only €0.50 in profit before the new €3 duty, which would push the platform into an outright loss.

Analysts warn other European nations may follow suit against platforms like AliExpress.

Kang Di is a lawyer at Beijing Ceehin (Shenzhen) Law Firm specializing in cross-border compliance and international trade rules. She said the law poses a substantive and far-reaching impact on platforms like Shein and Temu.

Kang noted the law introduces a "tiered eco-fine" mechanism, an EPR Bonus-Malus system, that directly squeezes the price advantage and profit margins of platforms selling low-priced items. This exposes companies to clear compliance red lines.

She added that the law also cuts off the social media influencer marketing channels these platforms rely on heavily. Non-compliant influencers face administrative fines of up to €100,000.

There’s a deeper political logic behind France's tough unilateral legislation in the fast-fashion sector, according to Kang. It is well rooted in a structural crisis facing its domestic retail sector.

Homegrown brands carrying the collective memory of France's middle class, such as Camaïeu and Naf Naf, have gone bankrupt or entered judicial restructuring one after another. France's traditional retail sector largely blames external competitive pressure for these struggles. It points to the tax exemption once enjoyed by Chinese cross-border platforms on small parcels, and to China's supply-chain flexibility.

Kang suggests the law is largely a defensive response to global supply-chain restructuring, one that objectively erects a trade barrier to protect the domestic textile industry.

Zara and H&M Left Untouched

European fast-fashion giants Zara, H&M and Primark are all exempt from the law. France's commerce minister openly stated, "We are here to protect French retailers." A French Senate rapporteur reportedly confirmed the government had already run simulations before the standards were finalized, showing only Chinese platforms would fall under the regulatory net.

According to China News Weekly, citing Song Liwei, a senior consultant at Shanghai Sanwei Law Firm, France's strained textile-recycling system and above-average carbon emissions from its textile sector are shared environmental problems across Europe.

The law traces its legislative roots to France's Anti-Waste and Circular Economy Law and its Climate Change Response and Resilience Law. Environmental NGOs, circular-economy associations and the garment-repair industry all lobbied throughout the process. Curbing single-use consumption and promoting circular fashion were the law's publicly stated goals.

The text itself names no specific country, platform or region, avoiding direct discrimination on paper.

However, Song also noted the rules effectively target Chinese cross-border direct-mail platforms, while European homegrown fast-fashion brands escape regulation. This has prompted even voices within the French parliament to criticize the law as "hijacked by lobbying from the domestic fashion industry, deliberately exempting Europe's own giants."

Fears of a Europe-Wide Domino Effect

Beyond French regulation, Chinese cross-border e-commerce platforms also face spillover regulatory pressure across Europe. The EU's Environment Council has begun coordinating related action. The Netherlands is raising its clothing recycling targets, while Germany is launching legislation for textile Extended Producer Responsibility (EPR).

Song warned this could trigger a chain reaction of other EU member states following France's lead. That would eventually form a unified regulatory framework across the entire EU, one that would fundamentally rewrite the underlying logic of how Chinese fast-fashion brands expand overseas.

Mao Paishou

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Washington is threatening to sanction Chinese AI models. Nvidia CEO Jensen Huang just told Axios something very different. In an exclusive interview in Fort Worth, Texas on July 21, Huang said US companies should be "absolutely" allowed to use open-source Chinese AI models. He went further: the odds that Chinese firms drive American companies out of business are zero.

Huang's answer was one word: "Absolutely." US firms should be allowed to use Chinese AI.

Huang's comments read like a direct warning to hawks in Washington pushing for a ban. The trigger was Moonshot AI's July 16 release of Kimi K3, a 2.8-trillion-parameter model and now the world's largest open-source system. Its aggressive pricing and upcoming open-weight downloads set off the sharpest wave of AI panic since DeepSeek rattled markets in early 2025. Kimi K3 beat Anthropic's Claude Opus 4.8 on multiple benchmarks, and chip stocks including Nvidia sold off on fears that cheaper, more efficient models would undercut the massive global bet on AI infrastructure.

The fallout came fast. US Treasury Secretary Bessent and Trade Representative Greer both spoke out the same day. Bessent told Fox Business that US authorities had found watermarks from American large language models embedded in several Chinese AI systems, calling it "unacceptable" and promising an investigation. Greer said Washington would examine whether China gained its edge through unfair means.

Bessent: “US watermarks found in Chinese AI models.” An investigation is coming

US media reported earlier that the White House is weighing a new executive order to restrict open-source AI, particularly systems from Chinese companies. The Commerce Department had already considered adding several Chinese AI labs to its Entity List last year.

Huang's logic cuts the other way. "The market misunderstood the impact of DeepSeek the first time," he told Axios, adding that Wall Street has "misunderstood the impact of Kimi again this time."

Kimi K3's launch rattled the entire AI industry.

Free, cheap open-source models, according to Huang, let AI reach far more consumers and businesses. That, he argued, drives strong demand for chips, data centers and computing power. "Free AI should be great for hardware," Huang said. "Free AI should be great for chips. Free AI should be great for data centers."

OpenAI and Anthropic have no reason to fear open models either, in Huang's view. Open-source systems expose more people to AI for the first time, which expands the whole market. Many of those users, he added, will still end up paying for the reliability and convenience of closed commercial services.

On security, Huang rejected the idea that downloading a Chinese model opens a backdoor to Beijing. Companies can fully customize and control access inside secure sandbox environments, he said.

Wong argued openness actually works the other way: outside researchers can inspect models, spot weaknesses and build defenses. "If everything just becomes one single model, one single point of attack, one single source of failure, I think the world is much, much more vulnerable."

Huang also called on Anthropic to open up its restricted cybersecurity model, Claude Mythos, rather than keep it locked down. "Holding Anthropic back is not in the benefit of the United States," he said, "Open models are available anyhow. So I think: Let Anthropic run."

On the US-China AI race, Huang staked out a position sharply at odds with Washington's. He rejected the idea that AI competition has a finish line. "We're going to continue to use AI forever," he said. "The United States is going to be here for a long time. China's going to be here for a long time."

Bloomberg cited several analysts drawing a contrast with the 2018 ban on Chinese 5G equipment. Freely downloadable, highly customizable software models have already embedded themselves deep in Silicon Valley's ecosystem. On OpenRouter, a platform offering access to multiple AI models, Chinese models now account for nearly 60% of token usage by US companies.

The adoption numbers back that up. DoorDash, Airbnb and Germany's Siemens have all shifted to Chinese models. More than 80% of US AI startups now make heavy use of Chinese models such as DeepSeek and Zhipu's GLM, with usage share holding above 30%, up from just 11% a year ago.

Nathan Lambert, an AI researcher at the University of California, Berkeley, put it bluntly: any form of ban would be a serious mistake for AI's long-term development.

Morgan Stanley believes the growth cycle in global AI computing demand is far from over. Bernstein estimates that even if Kimi K3 cuts single-run training costs by roughly 40%, competitive pressure pushing firms to double their training frequency could still lift total computing demand by around 20%.