EU Accelerates Tariffs on Cheap Imports from Shein and Temu

European finance ministers have reached an agreement to accelerate the implementation of customs duties on low-value parcels, moving the timeline to next year. This decisive action aims to curb the influx of inexpensive Chinese e-commerce imports from popular online platforms such as Shein and Temu, addressing a growing concern across the bloc regarding fair trade and market integrity.

At the core of the issue is the EU's "de minimis" customs duty exemption, which currently allows e-commerce parcels valued under 150 euros ($174) to enter the bloc duty-free. This waiver has been widely utilized by major online platforms, including Shein, Temu, AliExpress, and Amazon Haul, enabling them to dispatch a vast array of clothes, accessories, and gadgets directly from Chinese factories to European consumers at exceptionally low prices, undercutting local businesses.

The scale of this phenomenon has escalated dramatically, with the number of low-value e-commerce packages arriving in the EU doubling last year to an astounding 4.6 billion. The European Commission reports that over 90% of these packages originate from China. Furthermore, the EU executive estimates that approximately 65% of small parcels entering the EU are deliberately undervalued to evade customs duties, exacerbating the problem. Beyond economic concerns, the EU also highlights risks to consumer safety from non-compliant products, environmental damage due to products with short lifespans, and significant harm to EU industry, particularly retailers, stemming from this import surge. This situation has been further compounded by the United States' decision to scrap its own "de minimis" policy (which allowed duty-free entry for parcels under $800), raising fears that even more cheap Chinese imports might be diverted to Europe.

In response, the EU is embarking on a comprehensive overhaul of its customs system. Key to this reform is the establishment of an EU Customs Authority and an EU Customs Data Hub. This ambitious initiative seeks to replace the current fragmented IT infrastructure across EU member states, which presently consists of 189 different customs IT systems. The Commission projects that this consolidation will save member states up to 2 billion euros annually while significantly enhancing coordination within the customs union. Despite the EU operating as a customs union with a common external tariff, each nation currently manages its own customs agency, underscoring the critical need for a centralized data hub.

The proposed EU Customs Data Hub is envisioned as a highly sensitive repository, described by Dutch lawmaker Dirk Gotink, who oversees the reforms for the European Parliament, as "basically an MRI scan of the European economy and of trade flows." Given the extreme sensitivity of this information, access to the data will be strictly regulated, and the hub will necessarily collaborate with European technology firms to ensure data security and integrity.

While the long-term vision includes the rollout of the data hub and the complete abolition of the 150 euro de minimis exemption, both are currently scheduled for 2028. This timeline is viewed by many as too slow given the urgency of the issue. To address this, the bloc intends to introduce a "simplified temporary customs fee" on low-value e-commerce packages, potentially by November 2026. This single, percentage-based duty on all such packages is expected to be finalized by finance ministers at their upcoming meeting on December 12.

In addition to the temporary customs fee, the Commission has also proposed a handling fee for low-value e-commerce packages. This would entail a 2 euro charge for packages delivered directly to consumers, or 50 cents for parcels managed by warehouses. Online retailers or importers would be held liable for these fees, which would be applied in addition to the temporary customs duty. The handling fee is likewise anticipated to be introduced in November 2026, or potentially earlier should an appropriate IT solution be developed to support its implementation.

Concurrently, several EU member states are vying to host the new EU Customs Authority. France has put forward Lille, a city in the north near the Belgian border, as its candidate. Poland is advocating for Warsaw, already home to the European border and coast guard agency Frontex, while Portugal has proposed Porto. These bids are currently under consideration, with a submission deadline set for November 27.