TECH

Latin American countries tighten rules against Shein and Temu

The Latin American textile industry is waging a regulatory battle against Chinese ultrafast fashion giants like Shein and Temu, which have flooded the regional market with ultrafast, low-priced clothing. According to a report by the Rest of World website, legislators in several countries are implementing or proposing new regulations to protect local manufacturers from unfair competition.

In Argentina, the impact is especially visible. The Galfione family's textile factory in Buenos Aires, which employs more than 100 people and was once a symbol of Argentina's industrial base, now operates at only 40% of its capacity. "We grew for decades and invested in world-class machinery," Luciano Galfione, president of the ProTejer trade association, told the publication. "Today these plants are museums, with six out of ten machines out of service."

Argentina leads movement with specific bill...The South American country is at the forefront of the anti-Shein movement in the region. The local textile industry is proposing legislation that would impose import controls and a flat 30% customs duty on e-commerce packages, seeking to level the playing field. The initiative has gained multi-party support in Congress.

"We are not afraid to compete, but it has to be on equal terms," ​​said Galfione. "When I sell a T-shirt online from my factory, I pay every imaginable tax. Shein sells the same way and pays none."

Senator Miguel Ángel Pichetto, who introduced the bill in December, wrote on social media in August that "we have to put an end to these indiscriminate opening policies that will destroy the national industry and leave thousands of Argentinians unemployed."

Explosion of ultrafast fashion in the region...The numbers illustrate the scale of the transformation. Between the end of 2022 and the end of 2023, Shein launched 1.5 million new products, compared to approximately 40,000 by Zara and 23,000 by H&M, according to Rest of World. In the first half of 2025, Temu's monthly active users in Latin America skyrocketed 143% compared to the previous year, reaching 105 million, according to market intelligence firm Sensor Tower.

In Argentina, the phenomenon gained momentum after changes implemented by President Javier Milei in 2024. The government reduced import restrictions, cut tariffs to 20%, eliminated licenses, and raised the tax exemption limit for door-to-door imports from US$50 to US$400 per package. The measure triggered an avalanche of online deliveries.

Argentine textile production plummeted by more than 20% last year, while cheap imports increased. The country's textile and apparel industry employs nearly 300,000 people.

Regulatory wave spreads across the continent...The Argentine movement is part of a coordinated regional response. Textile trade associations in Brazil and Mexico are coordinating similar efforts. Mexico recently raised tariffs on small packages from China to 33.5%, while Chile is moving toward applying a 19% value-added tax on low-cost imports. Ecuador began implementing a $20 tax on small packages in June.

The Argentine proposal mirrors the new French ultrafast fashion law, which adds a progressive "eco tax" and requires labels to disclose important environmental information. The bill stipulates that imports from Shein and Temu will undergo inspections verifying that the fabrics are non-toxic and environmentally safe, in addition to being subject to standard import tariffs and taxes.

Global regulatory context...Latin America joins a global movement against ultrafast fashion. In October, the French Senate approved a bill that will sanction Asian fast fashion companies based on their environmental impact. Last year, Indonesia lowered the threshold below which goods are exempt from import tariffs from $100 to $3, while South Africa began taxing small packages below $27. In August, the US eliminated its $800 tariff exemption, meaning that even the smallest imports now face tariffs.

Studies show that many items from ultrafast fashion brands like Shein are worn only a few times before being discarded. Investigations have revealed grueling working conditions in supplier factories and risks of significant environmental damage linked to ultra-cheap production.

Shein has disputed allegations of labor and environmental abuses, arguing that the reports often rely on "small and unrepresentative samples" that "do not convey the reality of Shein as an organization." The company said its regular supplier audits have shown "consistent improvement" in compliance and stated that factory workers at its Chinese suppliers earn, on average, more than double the local minimum wage. When the French Senate moved forward with its fast fashion legislation, Shein countered that it is not "a fast fashion company," but a technology-driven retailer that is "part of the solution."

by Diogo Rodriguez—Journalist and social scientist, with experience in economics, finance, science, technology, and other subjects. He is a fellow of the Tow-Knight Center for Entrepreneurial Journalism (CUNY).