On July 1, the European Union began enforcing a flat €3 customs duty on low-value e-commerce imports, effectively closing a long-standing tax loophole that had allowed Chinese platforms like Shein, Temu, and AliExpress to ship goods into Europe duty-free. Until now, parcels valued under €150 were exempt from customs duties, a policy that the European Council says created “unfair competition” for European retailers and raised serious concerns about product safety, fraud, and environmental damage.
The new duty applies to small parcels entering the bloc, which account for over two billion packages annually. According to the European Commission, up to 65 percent of these shipments arrive with misdeclared values or unverified safety profiles, overwhelming customs infrastructure. Laura Clays, spokesperson for the Belgian consumer organisation Testachats, noted that “only 0.006 percent of parcels get checked by customs,” allowing a flood of non-compliant goods into the market.
Closing the De Minimis Loophole
For years, companies like Shein exploited the so-called “de minimis” exemption, routing individual orders directly from Chinese factories to European consumers. This allowed them to avoid up to 12 percent in import duties, keeping production and shipping costs artificially low while bypassing European oversight. Dirk Gotink, a Dutch MEP for the European People’s Party, described the practice as “tax avoidance on an industrial scale.” Shein alone generated over €30 billion in global revenue through this model, undercutting European retailers who face structural costs 30 to 50 percent higher per garment.
The €3 duty is calculated based on the Harmonised System commodity code of each product. A package containing multiple items of different types—say, a textile, footwear, and a tech product—will incur a €9 charge, while multiple items of the same type trigger the fee only once. The measure applies to non-EU sellers registered under the Import One-Stop Shop VAT system, which covers 93 percent of all e-commerce imports into the EU. Enforcement relies on digital sales logs transmitted directly to customs authorities.
Safety and Environmental Fallout
The loophole’s closure comes amid mounting evidence of safety and environmental risks. Independent tests by Testachats found that “around 70 percent of the products did not comply or did not fully comply with all EU safety requirements,” Clays said. A Greenpeace Germany investigation revealed that 32 percent of tested apparel contained illegal concentrations of hazardous substances, including heavy metals, formaldehyde, and PFAS “forever chemicals” at levels up to 3,300 times the legal European threshold. Toys and children’s clothing also showed serious non-compliance, with dangerous shapes and loose components posing choking hazards.
Gotink highlighted the broader impact: “Fast fashion has destroyed the second-hand market in Europe and caused huge unfair competition for European clothing brands. The taxpayer pays a high price for this trade: fast fashion can contain chemical substances that shouldn’t be in Europe, like PFAS.” The hyper-production of ultra-fast fashion also generates a major environmental toll, as billions of individually packaged items are flown directly from Chinese factories to consumers, increasing aviation emissions compared with bulk maritime shipping.
Regulatory Overhaul
Beyond the customs duty, the EU has introduced a key legal change: as of March 26, digital marketplaces are reclassified as “deemed importers” under the new EU Customs Code Reform. Previously, consumers bore legal liability for unsafe products, while platforms acted as intermediaries with no responsibility. Now, platforms like Shein and Temu are legally responsible for safety certifications and chemical testing, exposing them to severe financial penalties or market bans for non-compliance.
The €3 duty is a temporary measure until a broader permanent system for low-value imports takes effect, agreed in November 2025 as part of wider customs reforms. In 2028, the permanent EU Customs Data Hub will go live, removing the €150 threshold entirely. Gotink stressed that “what the EU and especially member states need to do is invest massively in their ability to control the products that are coming into the European market.”
For European consumers, the changes mean higher costs for cheap imports but potentially safer products and a more level playing field for local retailers. The move also aligns with broader EU efforts to tighten trade rules, as seen in the ongoing debate over Russian gas imports and the push for a Capital Markets Union to strengthen the euro’s global role.
