No more free pass: EU ends duty-free shopping from Chinese e-commerce

BRUSSELS (CN) — Starting in July, Europeans ordering a dress and lipstick from Shein will pay at least 6 euros ($7) in new customs duties — 3 euros for the clothing, 3 euros for the cosmetics — as the EU ends a decades-old loophole that let cheap goods from China flood European markets duty-free.

EU finance ministers on Friday formally scrapped a 150-euro threshold that allowed low-value items to enter Europe without paying customs duties. The move targets platforms like Temu, Shein and AliExpress that have exploited the loophole.

The scale of the problem forced officials to act. Around 4.6 billion low-value parcels entered the EU in 2024 — about 12 million daily and twice as many as the year before. The EU estimates 91% of all e-commerce shipments valued under 150 euros came from China in 2024, while customs authorities inspected only 0.0082% of products entering Europe — roughly 82 items per million released.

The move follows a similar crackdown in the United States, where President Donald Trump eliminated the $800 de minimis threshold in August. Both governments cited concerns about Chinese e-commerce platforms exploiting duty-free loopholes to undercut domestic retailers.

“A quick solution that was necessary because many member states are seeing local shops closed due to large volumes of low cost imports with no customs duty, especially from China,” Danish Economic Affairs Minister Stephanie Lose told reporters. “We need to ensure fair competition and we demonstrated that we can act quickly and decisively when needed.”

Ministers approved a temporary 3-euro flat fee per item type starting July 2026 as an emergency measure. A parcel containing only clothing would be charged once, but adding beauty products triggers another 3-euro fee. That’s two years ahead of a permanent system launching in 2028, when products will pay their actual duty rates based on classification — which range from near-zero for some electronics to 12% or more for textiles.

The threshold hurt European sellers who must factor customs costs into pricing. But it also created safety problems — consumer groups say the exemption allowed dangerous products to flood European markets.

“Today, many illegal cheap products fall through the cracks of customs controls because of this exemption, and this puts consumers safety at risk,” Léa Auffret, head of international affairs at BEUC, the European Consumer Organisation, told Courthouse News. “We are talking about toys that can cause injuries to children, phone chargers that can burst on fire and cosmetics with banned chemicals.”

Consumer organizations across Europe have tested products from these platforms and found widespread safety violations. But Auffret warned that customs duties alone won’t fix the problem. “For this to work, the ongoing reform of EU customs policy must impose clearer obligations on marketplaces to ensure compliance with EU laws. And when they fail to do so, there should be sanctions.”

The old system gave Chinese platforms a clear advantage. They could ship directly to European consumers in small quantities and skip the customs duties that European retailers must pay. European officials say up to 65% of small parcels are deliberately undervalued to dodge duties. The exemption also created perverse incentives: Platforms split shipments into individual parcels to stay under the threshold, multiplying packaging waste and emissions.

“It was an agreement that had wide support among member states and the commission,” Lose said. EU economy chief Valdis Dombrovskis added that the measure “represents an important step towards ensuring a level playing field for European businesses.”

Trade chief Maroš Šefčovič described the changes as “the most ambitious customs reform since the creation of the Customs Union in 1968,” when European countries agreed to scrap tariffs between themselves and charge common rates on outside imports. He said the reform aims to create “a modern, digital environment that keeps international trade flowing smoothly, while protecting the strength and integrity of our single market.”

A separate handling fee — meant to compensate customs authorities for processing costs — remains under negotiation. The European Council — where EU member states make decisions together — wants that fee to take effect in November 2026, though the final amount and timing are still being worked out as part of the broader customs reform package.

Implementation now becomes the challenge. The EU is working on legal amendments and building the IT systems to handle the new approach — but questions remain about whether customs authorities can effectively process duties on millions of small parcels. Enforcement and accurate valuation challenges will persist, particularly during the transition before 2028.

Esther Goreichy, a researcher at the Mercator Institute for China Studies who follows EU-China trade, cautioned the customs change has limits. “It will not solve the challenges we have on standards, on transparency or on sustainability,” she said. “So it’s a first step.”

The measure could force platforms to restructure how they operate in Europe. Shein’s business model “does not allow for restructuring because they operate based on very low inventory,” Goreichy said. “Shifting their business model towards holding inventory and shipping in bulk would be difficult.” She predicted platforms would likely increase prices or absorb costs by reducing profit margins, though “it’s not that every price is going to be increased by 3 euros.”

The customs crackdown piles onto existing regulatory pressure. Temu and AliExpress face preliminary findings that they violated European rules by failing to stop illegal products. Shein’s troubles are worse — Brussels demanded answers in November after French authorities moved to suspend the platform over sales of childlike sex dolls and weapons. Consumer protection authorities have also hit all three for fake discounts and misleading claims.

The customs change fits into a broader pattern of EU measures targeting Chinese trade practices, including probes into subsidies for electric vehicles, solar panels and wind turbines. The 91% figure for Chinese origin of packages under 150 euros makes this policy’s primary target clear, as Europe seeks to reduce economic dependencies on China while maintaining trade relationships.

The 150-euro customs duty threshold has been in place for decades, established before e-commerce transformed cross-border retail. While VAT rules were updated in 2021 to apply to all imported goods regardless of value, the customs duty exemption stayed in place — creating the gap officials say Chinese platforms exploited.

The threshold was originally designed to reduce paperwork for customs authorities processing low-value goods. But the explosion in direct-to-consumer e-commerce from China — particularly through platforms optimized for individual parcel shipments — transformed what was once a minor convenience into a major trade distortion affecting billions of euros in commerce annually.

Courthouse News correspondent Yuval Molina is based in Brussels, Belgium.