EU Implements €2 Fee on Small Parcels to Regulate E-commerce

The European Union has introduced a €2 tax on small parcels under €150, impacting e-commerce from China. This move aims to enhance customs regulation and generate revenue, particularly affecting popular platforms like Shein and Temu, which have seen rapid growth in the EU market.

The European Union has taken a significant step by proposing a two-euro flat fee on small parcels delivered directly to consumers' homes, primarily targeting imports from China. Under the new directive, packages valued at less than 150 euros (£126) will no longer qualify for customs-free status. This shift is expected to impact major online platforms such as Temu and Shein, as indicated by EU Trade Commissioner Maros Sefcovic during a discussion in the European Parliament.

In 2022, approximately 4.6 billion small parcels entered the EU, with over 90% originating from Chinese vendors. The EU has underscored the high volume of shipments as a burden on customs operations, complicating efforts to screen goods for safety compliance and product standards. According to Sefcovic, the fee would help defray these costs while contributing to EU budgetary revenue.

The new fee structure specifies that parcels sent directly to consumers will incur a €2 charge, while those sent to warehouses or distribution centers will face a reduced fee of 0.50 euros (£0.42). This regulatory action coincides with recent tariff implementations in the United States that also address Chinese imports, reflecting a broader international shift toward taxing small packages.

Business analysts have raised concerns that the influx of inexpensive Chinese products could undermine local European retailers, who claim they already struggle against competition that often evades EU regulatory standards. In response, both Shein and Temu have expressed willingness to comply with European regulations and product standards, with Temu boasting an impressive 92 million users in the EU and Shein reporting over 130 million.

This regulatory move adds complexity for China-based platforms, especially as they previously benefitted from the "de minimis" exemption, allowing the shipment of low-value items to the US without incurring additional fees. With the new changes in tariffs in the US and the growing scrutiny in Europe, the landscape for e-commerce appears to be shifting significantly.