EU Introduces €2 Fee on Small Parcels, Targeting Chinese E-Commerce Giants

The EU has unveiled a plan for a €2 fee on small parcels shipped directly to consumers, primarily impacting Chinese e-commerce platforms such as Shein and Temu. This move comes amid concerns over customs workload and competition with local retailers.

The European Union (EU) has announced a significant policy change aimed at regulating the influx of small parcels into its market. A proposed flat fee of €2 will be implemented on billions of these parcels shipped directly to consumers' homes, particularly targeting goods from China. According to EU Trade Commissioner Maros Sefcovic, this fee applies to packages valued under 150 euros (£126), effectively removing their customs-free status.

Last year, the EU saw an astonishing 4.6 billion parcels enter its borders, predominantly from Chinese online platforms like Shein and Temu. This surge in shipments has created an overwhelming burden on EU customs personnel, leading Sefcovic to emphasize the need for tighter regulations. He stated that the new fee aims to help offset the costs associated with customs processing and improve safety checks for goods entering the EU market. Furthermore, the revenue collected is expected to contribute to the EU budget.

The planned fee will specifically target packages shipped directly to consumers, whereas parcels sent to warehouses will incur a lower tax rate of €0.50 (£0.42). This regulatory change aligns the EU's approach with the recent tariffs imposed by the United States on Chinese imports, which include a charge on small packages. Following US negotiations, the tariff for packages worth up to $800 (£606) was reduced but maintains a significant flat fee.

European retailers have previously raised concerns regarding the competitive edge held by overseas companies that often bypass stringent EU product standards. Both Shein and Temu have expressed their willingness to comply with regulatory requirements to ensure products meet consumer standards. Temu boasts a user base of 92 million in the EU, while Shein claims over 130 million users in the region.

Before the introduction of these tariffs, platforms like Shein and Temu benefited from "de minimis" exemptions in the US, allowing for the shipment of low-value goods without import taxes. However, the evolving trade landscape may require a reassessment of tax-free shipping protocols for these companies that are now under the EU’s regulatory scrutiny.