Starting July 1, the EU has ended a decades-old exception, imposing a €3 duty on low-value imports previously entering the bloc duty-free. The change targets a surge in low-value imports, aiming to level the playing field for EU firms.
Retailers will face increased costs, but compliance and trackability should improve.
The de minimis exemption, adopted in 2006, allowed goods under €150 to enter the EU without tariffs. Initially, this reduced administrative burdens. The electronic commerce boom and the digitization of customs procedures have since altered the environment.
Low-value parcels entering the EU rose from 1.3 billion to 5.9 billion. Ninety percent of these shipments came from China, with online marketplaces like Shein and Temu. The number is expected to increase to 930,000 units in 2025.
Lowering competition concerns, the EU’s move might impact small businesses and consumers.
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Finland received €29.4 million in tax revenue from low-value e-commerce imports. Domestic purchases could have generated €324.2 million, highlighting the tax losses from foreign e-commerce.
Jaana Kurjenoja, chief economist of the Finnish Commerce Federation, cited tax losses due to consumers bypassing domestic costs by purchasing from foreign online stores that evade local labour and corporate taxes.
The EU’s shift targets not just financial fairness but also social and environmental standards. Cheap labor and lax regulations in fast fashion pose a significant challenge to EU producers.
A 2022 documentary revealed Shein’s supply chain workers endure harsh conditions. Workers reported earning just £0.03 per item and working over 16 hours daily. The report’s findings aligned, with workers in Panyu logging 75-hour weeks.
The carbon footprint of fast fashion significantly surpasses that of traditional fashion. Production occurs mainly in China and India. However, the EU, UK, and North America dominate global consumption.
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The EU’s Carbon Border Adjustment Mechanism (CBAM) aims to align environmental standards. The EU changed the rules to be weight-based. This change will burden commercial e-commerce giants.
Manufacturers exporting to the EU, who previously had an unfair advantage, will now face taxes. The EU’s Forced Labour Regulation will ban products made with forced labor from the bloc’s market.
The abolition of the de minimis exemption increases traceability. Product identifiers (PIDs) will become mandatory on November 1, 2026.
The EU’s actions are part of a broader effort to ensure fair competition and enforce environmental and labor standards across the bloc.
The team expects short-term disruption as retailers, platforms, and consumers adjust. However, global trade is resilient, and businesses will adapt by optimizing supply chains and improving data quality.