The European Union (EU) is set to implement a two-euro flat fee on billions of small parcels sent directly to consumers, a move that could significantly impact major online marketplaces such as Shein and Temu. Currently, these parcels—mostly originating from China—are exempt from customs duties if valued under 150 euros (£126). However, with last year witnessing about 4.6 billion of these parcels entering the EU, a staggering 90% from China, EU Trade Commissioner Maros Sefcovic highlighted the challenges posed on customs operations, pushing for this tax to alleviate the workload.
Sefcovic addressed the European Parliament, stating the fee would help cover the costs associated with monitoring and ensuring the safety and compliance of goods entering the bloc. Furthermore, the EU intends to channel some of the revenue generated into its budget. The flat fee would be imposed specifically on direct consumer shipments, while parcels sent to warehouses would incur a reduced fee of 0.50 euros (£0.42).
This initiative follows actions taken by the US under former President Donald Trump, which introduced tariffs on Chinese goods, including significant duties on low-value parcels. Although the US recently softened its approach by lowering the tariff rate on packages worth up to $800 (£606) to 54% from 120%, they still retain a flat fee of $100 per parcel.
European retailers have long argued that they are at a disadvantage against these foreign competitors, specifically criticizing the latter for not adhering to the EU's rigorous product standards. Both Shein and Temu have previously expressed commitment to working with regulators to meet consumer safety expectations. With Temu boasting around 92 million users across the EU and Shein claiming over 130 million, the impacts of this new fee could reshape their operational strategies in the highly competitive European e-commerce landscape.
In summary, this EU proposal seeks to level the playing field for local retailers, addressing concerns about the overwhelming number of low-cost imports and ensuring consumer safety standards are upheld amid a rapidly evolving global trade environment.
