Ecuador imposes tariffs on packages from China to safeguard local production

Ecuador recently announced that all packages shipped from China by companies such as Temu and Shein will now incur a $20 tariff. This decision was made by the Ministry of Production and Foreign Trade and went into effect on June 16, 2025. The reason behind this policy change is to protect the local production industry and to restrict the informal commercial use of a courier shipping method which was originally intended for personal items. Over the last four years, the number of packages imported under this modality skyrocketed, raising concerns about its impact on domestic sectors, especially textiles and footwear. The growth in imports has led to serious repercussions for local businesses, with the Ecuadorian government reporting a loss of more than $69 million and a seven-percent reduction in adequate employment in the textile sector. Additionally, the footwear industry experienced an eight-percent drop in sales, disproportionately affecting local micro-enterprises. The government has attributed these negative effects to the significant rise in imports of clothing and footwear, which are considered sensitive products for domestic production. With approximately 68 percent of imported package contents falling into these categories, the government aims to rectify the market imbalance. Authorities have observed that companies like Temu and Shein have exploited loopholes in existing customs regulations to bypass certain limits intended for personal imports. With the number of packages arriving from these platforms rising dramatically, local industries have been stressed under the pressure of this influx. Ecuador’s Deputy Production Minister Andrés Robalino highlighted that the previous system has suffered from abuse, with many using multiple IDs and credit cards to surpass annual limits and avoid applicable taxes. The Guayaquil Chamber of Commerce emphasized the competitive disadvantage faced by local traders who comply with tax obligations, while foreign platforms evade these costs. They are advocating for reforms in customs policy to ensure a level playing field in the retail market. Reports also indicate that local shipping companies have been overwhelmed by the surge in Temu package imports, struggling to manage logistics and delivery demands. Overall, the tariff is seen as a step towards enforcing fair trade practices and promoting the sustainability of Ecuador’s local industries amid increasing pressures from international e-commerce.