EU Implements Import Tax to Counter Surge in Ultra-Cheap Goods

Gerik

Summary:

Starting July 2026, the European Union will impose a €3 fixed import tax on all low-value packages to curb the influx of cheap goods from platforms like Shein and Temu and restore competitive fairness for domestic businesses....

Combatting the “Super-Cheap” Invasion

On December 12, EU finance ministers unanimously agreed to introduce a €3 import tax per parcel on low-value goods entering the bloc, effective from July 1, 2026. This measure directly targets the explosive growth of ultra-cheap merchandise shipped to European consumers via cross-border e-commerce platforms such as Shein, Temu, and AliExpress. It follows the EU’s earlier decision to eliminate the longstanding import duty exemption for packages under €150, which had previously allowed many low-cost goods to enter the 27-member bloc untaxed.

This policy shift reflects a growing concern that the loophole has distorted the single market by enabling offshore retailers to undercut domestic businesses on both price and compliance. French Finance Minister Roland Lescure, whose country handled nearly 800 million such parcels in the past year, called the measure “a major victory” for the EU’s economic sovereignty, stressing its importance for consumer protection and fair competition.

Massive Parcel Volumes Prompt Urgent Action

In 2023, an estimated 4.6 billion small packages equating to over 145 parcels per second were shipped into the EU, with 91% originating from China. The volume is projected to increase in the coming years. The overwhelming scale of this trade and the opaque enforcement of product safety and taxation standards by foreign sellers have fueled political momentum for reform.

The newly approved €3 levy will serve as a temporary mechanism while the EU finalizes a more comprehensive and permanent taxation framework for low-value imports. In parallel, the European Commission has floated an additional €2 processing fee proposal, which is still under negotiation among member states and may be implemented by the end of 2026.

Economic and Competitive Implications

The import tax aims to restore a level playing field for European retailers who argue they are disadvantaged by platforms exploiting the current customs framework. Many of these online sellers are perceived to bypass strict EU regulations on safety, labeling, and environmental standards, giving them a cost advantage over EU-based competitors.

This policy introduces a direct causal lever: by standardizing taxation across all incoming parcels, regardless of value, the EU aims to neutralize pricing distortions caused by previous exemptions. It also sends a signal that digital trade must comply with the same fiscal and regulatory responsibilities as physical retail.

Geopolitical and Policy Dimensions

While the tax is framed in economic terms, its underlying motivations are also geopolitical. With the majority of parcels originating from China, this move is part of the EU’s broader strategy to assert regulatory control and reduce vulnerability to external trade dependencies. It aligns with wider efforts across Western economies to scrutinize Chinese e-commerce giants, enforce product compliance, and curb import-driven imbalances.

By framing the issue as one of fairness and sovereignty, EU policymakers are also seeking to manage domestic political pressures from small and medium-sized enterprises and labor constituencies impacted by price competition from foreign digital platforms.

Towards a Holistic Taxation Regime

The €3 per parcel tax is only a transitional step. EU institutions are actively developing a permanent digital customs and taxation regime aimed at addressing structural issues in cross-border e-commerce. The final framework is expected to integrate digital declaration systems, enhanced product traceability, and uniform VAT enforcement across all member states.

This reflects a broader regulatory pivot toward digital economy governance, where transparency, traceability, and tax neutrality are critical. The challenge will be balancing these enforcement objectives with the EU’s digital trade commitments under WTO frameworks and bilateral agreements.

The EU’s decision to implement a €3 import tax on low-value parcels marks a significant shift in trade policy, targeting a flood of low-cost goods that have disrupted local markets. By closing loopholes and asserting regulatory control, the bloc aims to defend its economic sovereignty and protect domestic businesses. As the global e-commerce landscape continues to evolve, this move may signal a broader realignment of digital trade governance across advanced economies.

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