EU considers imposing tariffs on cheap Chinese online goods

The EU plans to impose customs duties on inexpensive goods purchased from online Chinese retailers such as Temu, Shein, and AliExpress. Under EU regulations, items bought online from non-EU countries are exempt from customs duties if their value is under €150. However, the European Commission is considering eliminating this threshold due to the overwhelming volume of e-commerce, with two billion parcels valued under €150 arriving in the EU from outside countries in 2023 alone.

Initially part of a broader customs overhaul introduced in May 2023, the proposed reform may now be accelerated to address the influx of low-cost imports. Critics, particularly in the United States, argue that companies like Shein and Temu exploit tax exemptions to offer products at significantly low prices, such as dresses for $8 and smartwatches for $25, undercutting local competitors.

Why does it matter?

Germany is one of the EU countries that supports an overhaul of the EU import taxes that could remove the duty-free exemption for parcels under €150. Germany’s leading retail association, Handelsverband Deutschland (HDE), has urged the government to act, claiming the exemption has caused a surge in small parcels from online platforms entering the EU. However, not everyone agrees. Ecommerce Europe, representing companies like Amazon and eBay, cautions that removing the duty-free limit could heighten trade tensions and provoke retaliatory actions from key partners such as the US.