American trade policy under Donald Trump is fundamentally reshaping international commerce flows and creating new investment trends for European markets. Chinese e-commerce giants like Temu, Shein, and TikTok are redirecting billions of dollars from the North American market to Europe, bringing both opportunities and challenges for local economies.
Massive Investment Shift from USA to Europe
Trump’s 145% tariffs on Chinese imports and elimination of low-value package exemptions have created a genuine investment exodus. Companies like Huang Lun’s Guangzhou-based firm, which previously generated 70% of revenue in the US, are now intensively investing in European markets.
Platforms are responding with aggressive investment strategies:
- Temu increased advertising spending in Europe 12-fold compared to the previous year
- In the United Kingdom, investments in advertising now exceed US spending fourfold
- Shein and TikTok provide direct subsidies up to $4.66 per order for European customers
Regulatory Barriers as Investment Catalysts
The European Union has tightened quality controls on imported products from Asia – 95% of 800 tested items failed to meet European standards. This situation creates investment opportunities for companies capable of navigating complex regulatory environments.
Key factors influencing investment decisions include:
- Requirement for VAT registration in each country individually
- Product localization and documentation requirements
- Growing investments in warehousing capacity across Europe
- Partnerships with local logistics companies
Opportunities for Local Investors and Retailers
The current situation opens several investment directions for European players. Martino Pessina from German chain Takko Fashion reports more favorable pricing conditions from Chinese suppliers due to temporarily reduced American demand.
Market transformation creates space for:
- Investments in quality control and product safety technologies
- Development of local distribution centers and logistics solutions
- Capital opportunities in compliance and certification services
- Modernization of customs processes and control automation
Future of Cross-border E-commerce Investment
Experts from IMD Business School predict that Chinese platforms can overcome regulatory obstacles through their adaptability. However, their ultra-low price model of algorithmically marketed products must adapt to European consumer preferences.
Temu has already signed a memorandum with DHL for continental logistics development, signaling long-term investment commitments. Half of British sales are expected to come from local sellers and warehouses by year-end.
Investment Risks and Challenges
Despite growth potential, investors in this segment face significant risks. The European Commission is formally investigating Temu for selling illegal products, while Shein faces sanctions for deceptive marketing practices.
Future investment decisions will depend on:
- Development of American trade policy and possible tariff reductions
- Speed of European regulatory changes
- Companies’ ability to adapt to fragmented European markets
- Effectiveness of safety standard enforcement
The current situation represents a breakthrough moment in global e-commerce, where investment flows are shifting from traditional markets toward more regulated but potentially more stable European economies.
