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

** 博客文章文責自負,不代表本公司立場 **

Bloomberg reported on October 14 local time that the EU is negotiating with China. Brussels hopes Beijing will lift sanctions on the small German company Sindlhauser Materials GmbH. That small firm supplies the Dutch ASML, the world's most important chip equipment manufacturer. The sanctions now threaten its survival.

EU seeks China deal to free ASML supplier Sindlhauser.　

The Deal on the Table

Bloomberg cited people in the know as saying the EU will remove trade restrictions on an unnamed Chinese company in exchange. That company is accused of assisting Russia in launching war against Ukraine.

In July this year, China imposed sanctions on Sindlhauser and 13 other European companies. The move retaliated for the EU's 21st round of sanctions against Russia. Sindlhauser is a small German company specializing in precision manufacturing and advanced coating technology for semiconductors and other industries.

In that round of sanctions, the EU listed several Chinese entities as sanctions targets. The EU said they were suspected of providing Russia with key components that could be used to manufacture weapons. Companies placed on the relevant EU and Chinese lists are subject to export controls.

People familiar with the matter said Sindlhauser relies on Chinese supplies of rare earths and critical minerals. If China's sanctions continue, the company will face the risk of bankruptcy within the coming months. It was also said this German company is part of ASML's supply chain.

ASML, Dutch semiconductor equipment giant.

Berlin and Brussels Race to Rescue Sindlhauser

Bloomberg sees a message in China's choice of target. Imposing controls on such an obscure company, the report argues, shows China knows exactly where Europe's economic bottlenecks sit.

An EU official says the European Union has begun discussions with China on whether each side would remove the entities from its own list. That means China's export control framework on one side, and the entities the EU has listed under its own regulations on the other.

The official added that any removal decision on the EU side would require unanimous support from all member states.

The trouble began in July when China's Ministry of Commerce put Sindlhauser on its export control list, and the company's first reaction was panic.

For weeks after the announcement, Sindlhauser had no clear view of whether, or how, it could keep operating.

Help came quickly. According to the people who knows what’s happening, the German government and the Bavarian state government, where Sindlhauser is headquartered, stepped in immediately to help the company find alternative suppliers wherever possible.

The two governments also explored other workarounds, such as recycling existing materials and seeking whatever financial support was available.

Brussels was watching too. Some officials there understood the company's plight and raised the matter with the Chinese side for several weeks.

Sindlhauser's rare earth supply nearly all Chinese.

A Policy Dilemma, an Intelligence Blind Spot

Sindlhauser sits squarely inside China's rare earth grip. According to the report, the company relies almost entirely on Chinese rare earths, and its placement on the export control list dealt a direct blow to its supply chain.

The company had previously taken almost no measures to diversify its supply sources or reduce its dependence on Chinese raw materials.

Some officials see a problem with the rescue. Removing companies such as Sindlhauser from the sanctions list, they worry, could once again weaken the urgency for these European companies to build supply chain networks outside China.

That leaves the German government and EU officials in a bind. Deciding through negotiations which companies go onto or come off trade restriction lists could set a bad precedent for other companies also hoping for sanctions exemptions. It would also mean the EU must make concessions on the question of certain Chinese entities.

But officials involved in handling the matter see a deeper problem. The situation behind the case, they argue, is more concerning, though not surprising.

The explanation: over the past year and a half, China has been collecting information on global supply chains as much as it possibly can. That is how China identified a small company in Bavaria as a supplier to the world's most important chip equipment manufacturer.

Beijing's map of global supply chains runs remarkably deep. The report credits that insight to the licensing system China has built for exports of critical minerals and rare earths.

The system requires foreign companies to submit detailed information, including their customers, how and where Chinese raw materials are used, and photos of the final products.

Germany shows the cost. Some companies have been leaking business secrets to China, while the German government remained completely unaware and unable to obtain the same or even similar information.

More important, the German government still has not formulated any strategy to address its shortcomings in economic intelligence.

A Possible Template, and China's Stated Position

The talks went straight to the top. According to the report, EU Trade Commissioner Maroš Šefčovič visited Beijing last week and met with Chinese Commerce Minister Wang Wentao. The two sides discussed lifting restrictions on Sindlhauser in exchange for relief for a Chinese company.

EU trade chief Šefčovič met Wang Wentao in Beijing.

The backdrop is stark. The EU is hunting for a fix to a massive trade deficit that exceeds $1 billion every single day.

People familiar with the matter say the two sides agreed in Beijing to strengthen information sharing and to give each other advance notice of export restriction measures.

The "one-for-one" arrangement around Sindlhauser, in which each side takes the other's company off its restriction list, could become a template for similar moves in the future. The EU is expected to act first. Only then would China lift its restrictions on the German company.

China's message has stayed consistent. The Chinese side has repeatedly stressed that China holds an objective and impartial position on the Ukraine crisis, stays committed to promoting peace talks, and plays a constructive role in advancing a political resolution of the crisis.

The opposition is just as firm. China firmly rejects the EU's blame-shifting, smears and denigration over the Ukraine crisis. It equally and firmly opposes the EU's unjustified listing and sanctions against Chinese companies and citizens.