The EU already knows how to curb the dominance of Temu and Shein in e-commerce: small packages

The European Union is taking steps to level the playing field in e-commerce by targeting tax exemptions that have benefited platforms like Temu and Shein. The EU's Economic and Financial Affairs Council (Ecofin) aims to end the tariff exemption for packages valued under 150 euros. This move seeks to address the competitive advantage enjoyed by certain e-commerce platforms. The core of the initiative involves eliminating the existing tariff exemption on imported goods below 150 euros. Initially proposed to be phased out by 2028, the EU is now pushing to accelerate this timeline to 2026. Data shows that in 2022, 91% of e-commerce shipments under 150 euros originated from China, with companies such as Alibaba, Temu, and Shein being major beneficiaries. The impact of this policy change will be felt across the e-commerce landscape. The EU estimates it loses 1.5 billion euros annually due to these import exemptions. In 2024, the value of goods imported under this threshold reached 4.6 billion euros, double the previous year's figure. Furthermore, the European Commission is considering a minimum tax of two euros per small package. Implementing these changes will require adapting customs systems, which is a complex undertaking. The EU's central data hub for customs, scheduled for operation in 2028, is crucial for enforcing the new regulations. The goal is to create fairer competition for European businesses that have struggled to compete with the current tax advantage.