EU Targets Temu, Shein With €2 Parcel Tax
2min read EU to Impose €2 Tax on Low-Cost Items in Blow to Temu and Shein
The European Union is planning to impose a flat €2 charge on billions of low-value parcels entering its market, a move that will deliver a new blow to online retailers like Temu and Shein that rely heavily on direct shipments of inexpensive goods from China.
According to the Financial Times, EU trade commissioner Maroš Šefčovič told the European Parliament on Tuesday that he had proposed the handling fee to address the challenges posed by the 4.6 billion parcels imported annually directly to consumers’ homes.
A draft proposal from the European Commission, seen by the FT, states that the €2 charge will apply to direct-to-door sales, while items shipped to centralized warehouses will incur a reduced fee of €0.50. Part of the revenue will go toward funding additional customs inspections, while the remainder will contribute to the EU’s general budget.
Šefčovič pledged to address the sharp rise in parcel volumes, which has led to an increase in dangerous or non-compliant products, as well as mounting complaints from EU retailers over unfair competition.
Profiting from Loopholes in Customs Rules
Chinese e-commerce platforms like Temu and Shein have been the biggest beneficiaries of minimum duty exemption thresholds in Western markets. Under current rules, items worth less than €150 in the EU or $800 (€764) in the US are exempt from duties and rarely subject to customs inspection.
Agustín Reyna, Director General of European consumer group BEUC, said: “All these products are sent individually from China, so it is impossible for customs officers to open and inspect every parcel.”
The explosive rise of Temu and Shein has triggered growing concern among Western regulators. Initially, these duty exemption rules were designed to prevent customs from being overwhelmed by personal gifts and small packages—not to be exploited by e-commerce giants.
Product Safety and Regulatory Avoidance
Many of the products sold on Chinese platforms reportedly fail to meet EU safety and environmental standards. At the end of 2023, the Brussels-based Toy Industries of Europe (TIE) tested 19 toys purchased from Temu; none fully complied with EU toy safety regulations, and all but one were deemed to pose real risks to children.
Unfair Competitive Advantage
Chinese platforms have gained asymmetric advantages by exploiting customs loopholes. By shipping directly from China to consumers worldwide, they bypass the high warehousing costs borne by platforms like Amazon.
As Temu and Shein eat into market share once dominated by Western platforms, local retailers and manufacturers have voiced frustration, while national governments raise concerns about lost tax revenues.
Reyna explained: “Temu and Shein can afford to absorb shipping costs thanks to massive production scale and Chinese government subsidies. This gives them a significant cost edge over European firms. They are effectively earning billions from a loophole that shouldn’t exist.”
