EU Introduces €2 Fee on Small Parcels, Impacting Chinese Retail Giants

The European Union aims to impose a flat fee on small parcels to enhance customs efficiency and revenue, responding to concerns over fair competition.

The European Union has announced a plan to impose a two-euro flat fee on billions of small parcels delivered directly to consumers' homes, primarily from China. This significant move means that packages valued under 150 euros (£126) will no longer enjoy customs exemptions, as stated by EU Trade Commissioner Maros Sefcovic.

Last year alone, the EU imported approximately 4.6 billion such parcels, with over 90% originating from China. Sefcovic highlighted that this immense volume has overwhelmed EU customs staff, complicating the verification of product safety and compliance with European standards. The proposed fee is seen as a measure to offset these operational costs while potentially generating additional revenue for the EU budget.

The two-euro charge will apply specifically to parcels shipped directly to consumers, with a reduced fee of 0.50 euros (£0.42) on items sent to warehouses. This policy follows recent tariff adjustments made by the United States on Chinese goods, which included fees on smaller package shipments. The US had previously increased tariffs on small packages but has since revised them following negotiations.

Concerns have arisen regarding the potential for Chinese e-commerce firms to inundate the European market with inexpensive goods, as they may redirect excess inventory initially meant for the US into Europe. European retailers have long expressed grievances about unfair competition posed by international companies that do not adhere to the EU's rigorous product standards.

Both Shein and Temu have pledged to comply with regulatory requirements and consumer safety standards. As reported, Temu claims to serve approximately 92 million users in the EU, while Shein boasts a user base of over 130 million. Before the US introduced tariffs, these platforms utilized the "de minimis" exemption that allowed low-value items to be shipped to US customers without incurring import taxes or duties.