Europe Sees 6 Billion Reasons for New Levy on Online Shoppers

dsabw1iqcqct2(wys3tb2nmr_media_dl_1.png UK Department for Business & Tra

Article content

(Bloomberg) — Bargain-hunting consumers across the European Union will start feeling the pinch of higher online shopping costs next week when a new levy primarily targeting China comes into force, adding a layer of trade friction between the two economies.

Article content

Starting July 1, a €3 duty will apply on items less than €150 ($172), a move aimed at slowing the flood of low-priced merchandise from outside the EU sold by sites like Shein and Temu.

Article content

Article content

Article content

E-commerce imports into the bloc reached nearly 6 billion items last year, and China accounted for about 90% of merchandise under €150, goods like fast fashion, beauty products and electronics.

Article content

Article content

The temporary EU duty in one sense reflects wide-ranging trade anxiety, which stretches from computer chips to rare earths to cars. Huge imports mean the bloc’s trade deficit with China is widening, and governments are worried how their domestic companies big and small can survive against Beijing’s heavily subsidized industries.

Article content

The new charge will hit shoppers because the EU is ending its so-called de minimis exemption, a tariff break which borrows a Latin phrase loosely meaning “too small to matter.” 

Article content

Sellers, parcel carriers or customs brokers will pay the extra charge and pass it on to buyers, and delayed shipments are possible. Delivery giant FedEx Corp., for example, said in an advisory on the new fee that it will “recover the amount from the customer.”

Article content

Border agencies allowed the exemption for decades to lighten their administrative load and keep costs low for online shoppers. But the subsequent deluge of cheap imports became a political issue that helped fuel protectionism.

Article content

Article content

The US last year closed its $800 tariff-free window, citing shipments that surged to 1.4 billion in 2024. That shift caused temporary disruptions. 

Article content

The EU says its move isn’t about protectionism but about a level playing field and better product safety.

Article content

“This has created an unfair competition that traditional retailers cannot compete with,” the European Commission, the EU’s executive body, said this month. 

Article content

The change adds another layer of bureaucracy for customs compliance managers that have already weathered trade upheavals ranging from Brexit to US President Donald Trump’s global tariffs.

Article content

The EU’s fee is collected on an individual item based on its product code. So a parcel with three t-shirts declared under the same tariff code would pay a €3 duty. A package with a t-shirt and a book would require €6. A shipment of three items listed with the same code but from three different countries, however, gets tagged for €9.

Article content

Added Complexity

Article content

“It’s going to make it more complex,” Mike Parra, head of DHL Express Europe, said in an interview. “You could have an initial wave of business that stops because you have a customer that, at the point of checkout, says, ‘forget it, I’m not buying it, I don’t want to pay the extra €3, €6, €9.’”