The European Commission is taking steps to address the surge of small-value packages entering the European Union, particularly those originating from Chinese e-commerce platforms like Shein and Temu. The Commission has proposed the removal of the current duty-free exemption for shipments valued under €150, citing concerns over product safety and the strain on customs resources.

The current regulations allow packages below this threshold to enter the EU without incurring import duties. However, the sheer volume of these shipments has become a significant challenge. According to the Commission, the number of small-value parcels entering the EU has risen sharply, increasing from 1.9 billion in 2023 to 4.2 billion in 2024. A substantial majority, 91 percent, of these parcels originate from China.

The Commission’s proposal is part of a broader effort to regulate the online sale of goods, with a particular focus on addressing the influx of potentially “dangerous” products. Concerns have been raised about the safety and compliance of goods sold by retailers such as Shein and Temu, prompting the EU to take action.

The rapid growth of these e-commerce platforms has placed considerable strain on EU customs regimes, which are struggling to handle the overwhelming volume of packages. The removal of the duty-free exemption is intended to help alleviate this burden and provide greater resources for customs authorities to inspect and regulate incoming goods.

The European Commission’s push is based on several key factors:

• Product Safety: There are increased worries about the safety of products sold through these platforms, and that they do not always adhere to EU safety regulations.
• Customs Overload: The huge amount of small packages is overwhelming the ability of customs agencies to process them.
• Fair Competition: There are concerns that the current rules give these non EU based companies an unfair advantage over EU based companies that must abide by all local laws and regulations.

By eliminating the duty-free threshold, the Commission aims to create a more level playing field for businesses and enhance consumer protection. The change would mean that all imported goods, regardless of value, would be subject to import duties and taxes.

This proposed change is expected to have a significant impact on Chinese e-commerce platforms operating within the EU, as it could increase the cost of their products for European consumers. The increased costs could also cause a change in the amount of purchases from those platforms.

The EU’s move reflects a growing global trend of increased scrutiny of cross-border e-commerce, as governments seek to address the challenges posed by the rapid growth of online retail.