EU Introduces €2 Levy on Small Parcels, Impacting Shein and Temu

The European Union's recent proposal for a €2 tax on small parcels could significantly alter the competitive landscape in online shopping, especially affecting Chinese e-commerce platforms like Shein and Temu.

The European Union has proposed a flat fee of two euros on billions of small parcels delivered directly to consumers’ homes, predominantly from China. This new tax means that packages valued at less than 150 euros (£126) will no longer be exempt from customs duties. EU Trade Commissioner Maros Sefcovic confirmed that online marketplaces, particularly the Chinese giants like Temu and Shein, would be required to pay this fee.

With an astounding 4.6 billion small parcels entering the EU last year, and over 90% of them originating from China, the volume has overwhelmed EU customs officials. Sefcovic explained that the fee would help compensate for the increased workload and challenges faced in ensuring the safety and quality of goods entering the bloc. Moreover, Brussels aims for some of the revenue from this fee to bolster the EU budget.

According to the proposal, packages sent directly to consumers will incur the two-euro charge, while those dispatched to warehouses will be taxed at a reduced rate of 0.50 euros (£0.42). The EU’s action mirrors the United States’ approach, where tariffs on Chinese goods have already increased, including a considerable fee on small packages.

Concerns have arisen that Chinese e-commerce companies could significantly undercut European competition by flooding the market with cheap alternatives, particularly if products initially intended for the U.S. market find their way to Europe. European retailers have long expressed frustrations over competition from overseas companies that often do not adhere to the EU’s stringent product standards.

Both Shein and Temu have previously mentioned their commitment to cooperating with regulators and upholding consumer safety standards. Temu claims to serve 92 million users within the EU, while Shein reports a user base of over 130 million.

Before the imposition of U.S. tariffs, platforms like Shein and Temu benefited from the “de minimis” exemption, allowing the import of low-value items directly to customers without any customs duties or taxes. As this regulatory landscape evolves, companies are reassessing their strategies to maintain their market presence in Europe.