EU Introduces €2 Fee on Small Parcel Deliveries Affecting Shein and Temu

The new proposal will eliminate customs-free status for packages under €150, addressing challenges faced by EU customs and ensuring compliance with product standards.

The European Union has announced plans to implement a flat fee of two euros on billions of small parcels that are shipped directly to consumers' homes, a significant move primarily targeting shipments from China. This fee marks a departure from the customs-free status previously enjoyed by packages valued at less than 150 euros (£126). According to EU Trade Commissioner Maros Sefcovic, the fee would apply to major online marketplaces, including well-known Chinese brands Temu and Shein.

Last year, approximately 4.6 billion small parcels entered the EU market, with over 90% originating from China. This surge in volume has overwhelmed EU customs officials, leading to concerns about the adequacy of safety checks and compliance with product standards. Sefcovic highlighted the necessity of this fee, stating it is intended to "compensate the cost" of managing this influx and suggesting that a portion of the resulting revenue would contribute to the EU budget.

The proposed fee structure distinguishes between packages sent directly to consumers, subject to the two-euro charge, and those sent to warehouses, which would incur a lower fee of 0.50 euros (£0.42). This move aligns with recent developments in the U.S., where the Administration modified tariffs on Chinese imports, initially imposing high rates but recently revising them for certain categories.

There are ongoing concerns within the EU about potential market flooding by Chinese e-commerce giants, particularly as some products originally directed to the United States could be redirected to Europe. European retailers have long argued that they face unfair competition from foreign entities that do not adhere to the EU's stringent product regulations. Notably, Temu claims to have 92 million users in the EU, while Shein has reported over 130 million users.

Previous to the introduction of U.S. tariffs, online platforms like Shein and Temu utilized the "de minimis" exemption, which allowed them to ship low-value items to U.S. customers without incurring tax or duties. However, the EU's current review of the tax-free parcel rule means that Shein and Temu will have to adapt to new compliance measures as the regulatory landscape evolves.