EU ends duty-free treatment for cheap parcels, charging €3 per item from July 1

Summary

The European Union ended duty-free treatment for low-value parcels on July 1, 2026, introducing a flat-rate €3 customs charge per product category for items valued under €150 imported from outside the bloc. The measure, agreed by EU member states in December 2025 and effective through mid-2028, targets the business model used by Chinese fast-fashion and e-commerce platforms, particularly Temu, Shein and AliExpress, which together shipped 5.9 billion items into the EU in 2025 without paying customs duties. A multi-category parcel (shirts and a phone cable) now carries €6 in duty rather than zero. Platforms that fulfil orders from EU-based warehouses escape the per-item charge.

The split

Brussels and European retailers frame the measure as correcting a decades-old loophole that let Chinese platforms undercut EU sellers on price by avoiding import duties and bypassing product-safety checks on individual items. Temu, Shein and AliExpress have publicly accepted the new rules but have been building European warehouse capacity for months, effectively absorbing part of the cost structurally. Consumer groups in Germany and France warn that the duty will fall disproportionately on lower-income shoppers who rely on ultra-cheap Chinese platforms, while business associations in China characterise the levy as a trade barrier rather than a safety or fairness measure. The US Section 301 tariff hearings in July 2026 run in parallel, and both regimes represent a global tightening against low-cost Chinese e-commerce.

By the numbers

• €3, flat-rate duty per product category on parcels worth up to €150.
• 5.9 billion, low-value parcels entering the EU duty-free in 2025.
• €150, the previous duty-free threshold (the "de minimis" exemption, now removed).
• 93%, share of e-commerce imports covered by the IOSS system affected.
• 80%, share of EU orders Temu aims to fulfil from European warehouses by end-2026.
• July 2028, the end date of the temporary flat-rate measure before standard tariff rates apply.

Why it matters

The move changes the structural economics of cross-border e-commerce to the EU, the world's largest single market. It pressures Chinese platforms to invest in EU fulfilment infrastructure rather than pay per-item duties, which accelerates Chinese capital deployment into European logistics networks, a trade-off Brussels has not fully addressed. For smaller Chinese sellers on marketplaces, the additional cost, combined with tighter product-safety requirements under the EU's General Product Safety Regulation, sharply raises the cost of serving the EU market.

What to watch

• How Temu, Shein and AliExpress adjust checkout prices in July versus absorbing the duty as a margin cost.
• European customs agencies' enforcement capacity: the volume of 5.9 billion annual parcels makes systematic checks impossible without automation.
• The November 2026 implementation of the separate €2 Customs Handling Fee, which stacks on top of today's levy.
• WTO complaints from China or other trading partners against the measure.