Read on FashionNetwork.comEU Implements €3 Levy on Small Parcels to Curb Shein and Temu Imports
Starting July 1, the European Union will impose a €3 levy on small parcels entering from non-EU countries, ending the long-standing tax exemption for shipments valued under €150. This measure, primarily targeting the flood of low-cost goods from Chinese e-commerce platforms like Shein and Temu, aims to address unfair competition and enhance product safety controls. The move responds to a dramatic surge in parcel volumes, which reached 4.6 billion consignments in 2024, 91% originating from China, overwhelming customs infrastructure and raising concerns about non-compliant products.
Beginning July 1, 2026, the European Union will enact a significant policy shift by introducing a €3 levy on all small parcels entering its territory from non-EU countries. This measure marks the definitive end of the tax exemption previously granted to shipments valued under €150, a threshold that had facilitated a massive influx of low-cost goods, predominantly from Chinese e-commerce giants. The policy is a direct response to the overwhelming volume of parcels from platforms like Shein, Temu, and AliExpress, which European officials and businesses argue creates unfair competition and poses challenges for safety compliance and customs operations.
The Rationale Behind the New Levy
The decision to implement the €3 flat-rate tax stems from a confluence of economic and regulatory pressures. In 2024 alone, an estimated 4.6 billion consignments worth less than €150 entered the EU market, a staggering volume translating to over 145 parcels every second. As noted by French Economy Minister Roland Lescure, the number of parcels from China has quadrupled from one billion to over four billion in just four years. This deluge has been denounced by European producers and retailers as a form of unfair competition, as these low-value imports often bypass the taxes and regulatory costs borne by local businesses.
Beyond economic fairness, the volume has created a Herculean task for customs authorities. The sheer number of parcels frequently prevents thorough checks for compliance with European safety standards, making it difficult to intercept dangerous or counterfeit products before they reach consumers. The new levy, therefore, serves a dual purpose: leveling the playing field for EU businesses and generating revenue to bolster customs controls and enforcement capabilities.
Implementation and Transitional Challenges
The EU finance ministers agreed in principle to scrap the duty-free status in late 2025, accelerating a measure originally planned for 2028 as part of a broader Customs Union reform. Implementing this change by July 2026, however, presents significant logistical hurdles. Applying the standard, variable customs duties—which differ by product category and country of origin—to billions of small parcels was deemed unworkable, risking the complete clogging of already overburdened customs services.
Instead, officials have opted for a simplified, flat-rate €3 tax as a transitional solution. As Minister Lescure argued, a proportional tax would not act as a sufficient deterrent, whereas a flat fee is designed to have a tangible impact. This interim system will remain in place until the new EU customs data platform, designed to streamline duty collection, becomes operational. Setting up this provisional mechanism with existing resources has been described by a European diplomat as "not easy," highlighting the complexity of the task.
Broader EU Offensive Against Non-Compliant Imports
The €3 levy is merely the first step in a broader EU strategy to manage the influx of low-value goods. From November 2026, the bloc plans to introduce an additional €2 handling fee per parcel valued under €150. This fee is intended to directly finance the enhancement of customs controls and inspections. Together, these charges aim to rectify the competitive imbalance between European products, which are subject to full taxation and regulatory compliance, and the often non-compliant "made in China" competition that has dominated the small parcel market.
The policy shift has been strongly advocated by France, which has been in a stand-off with Shein following controversies over product sales. The move reflects a growing consensus within the EU on the need to protect the single market's integrity, ensure consumer safety, and support local retail and manufacturing sectors facing unprecedented pressure from ultra-fast fashion and discount e-commerce models.
In conclusion, the EU's introduction of a €3 levy on small parcels represents a pivotal move to recalibrate its trade environment. By ending the tax exemption for sub-€150 shipments, the bloc seeks to curb the unsustainable flow of goods from non-EU e-commerce platforms, address unfair competitive practices, and strengthen its customs enforcement framework. This policy marks a significant step toward ensuring that the digital single market operates on a level playing field, safeguarding both European businesses and consumers.
