Latin America Cracks Down on Temu and Shein as Cheap Imports Flood the Market

Governments across Latin America are tightening tax rules on Chinese e-commerce platforms after an unprecedented surge in bargain imports overwhelmed customs offices and hit local businesses.

Market research firm Sensor Tower reports that Temu, part of PDD Holdings, reached 105 million monthly active users in Latin America in the first half of 2025, a 143 percent jump from a year earlier.

This explosive growth turned cross-border shopping into a political and economic issue that no government can ignore. Mexico raised tariffs on small packages from countries without trade deals, such as China, from 19 to 33.5 percent.

Officials explained the move as protection for domestic manufacturers and an attempt to curb illegal reselling. Authorities also confirmed recent seizures of counterfeit clothing and toys entering without duties.

Chile, long one of the region’s most open economies, will require a 19 percent value-added tax on all online imports from October 25, 2025. Purchases under 41 US dollars had been exempt.

The tax authority said foreign sellers and platforms must collect and transfer the tax directly. Ecuador changed its popular “4×4” courier regime in June 2025. Every package under four kilograms and 400 US dollars now pays a 20-dollar charge.

Customs data shows shipments under this regime rose from 879,000 packages worth 102.7 million US dollars in 2020 to 6.5 million packages worth 502 million in 2024.

Uruguay Targets Foreign E-Commerce With New VAT Plan

Uruguay announced in August that it will propose value-added tax on foreign e-commerce purchases in its new five-year budget, excluding goods from the United States.

Customs data shows low-value imports tripled in early 2025 to nearly one million packages worth 93 million dollars. This regional push aligns with global measures.

The United States confirmed that low-value Chinese imports lose duty-free treatment on August 29, 2025. The European Commission announced in July that Temu faces potential penalties under the Digital Services Act for failing to block illegal goods.

The platforms are adjusting. Temu now allows local Mexican sellers and stores inventory in Mexico, Colombia, Chile, and Peru to speed delivery and avoid some cross-border taxes.

Yet traditional retailers say the pressure remains. In Uruguay, for example, shop owners report falling sales as cheap online products dominate.