Is It the End for Temu and Shein? EU's New €3 Customs Duty Could Make Every Haul More Expensive

Millions of Temu and Shein shoppers from Europe face the new EU €3 customs fee, equivalent to £2.57 and $3.43. There are an estimated 130 million Temu and 145 million Shein monthly users in the region.

Starting 1 July, the EU has abolished an 'outdated customs duty exemption for e-commerce packages worth less than €150 (£128.44 and $171.61).' Temu, Shein, and AliExpress have long benefited from this exemption, a practice welcomed by many European online shoppers. However, independent companies within the European Union face significant disadvantages against these fast-fashion giants.

'The measure will help ensure fair conditions for EU businesses and safe choices for consumers, in response to the surge of billions of low-value e-commerce goods entering the EU,' read the press release of the European Commission. 'The €150 customs duty exemption was designed for an era of occasional online purchases and less digitalised customs systems.'

Will Temu and Shein Prices Increase?

The new EU regulation will surely end ultra-cheap hauls from the three big online China-based e-commerce platforms. The €3 EU customs fee will be imposed per product category. If a cart contains a pair of shoes, two bags, and three T-shirts, the EU will impose the parcel fee three times—once for the shoes, once for the bag, and once for the T-shirt.

The EU is also looking at a handling fee of €2 (£1.71 and $2.29), which may be imposed later this year. There will be tighter digital screening at the border, too, to make sure there is an accurate customs declaration.

The EU fears constant low-cost shopping from China will eventually bury European businesses. Last year, the EU noted some 5.9 billion low-value items imported from third countries, or those not part of the EU or the European Economic Area. These low-value items represent 97% of all imported items in the EU, and are all exempted from customs duties.

Because of their affordability, these packages represent only 2% of the EU's total import value. The exemption also prompted undervaluation of goods to take advantage of the former regulation.

The European Commission has confirmed that e-commerce platforms are legally responsible for paying the new EU parcel fee. Although the duty is charged to sellers, prices on Temu, Shein and AliExpress are widely expected to rise as platforms are likely to pass the cost on to cosumers.

Europeans Fear More Expensive Online Shopping

'You do realise that the companies will transmit these costs to the customer? What a (nonsensical) post,' a German user replied to the Commission's announcement. A UK-based entrepreneur added, 'Typical lanyard class, non-business eurocrats who don't realise the results of their stupid policies. Anyone in business would pass the cost on, probably wasn't on the PowerPoint.'

Portuguese economist Carlos Guimarães Pinto tested the new regulation on a €20 (£17.13 and $22.88) purchase. He said, 'Tariff over 50% on this purchase. Plus the additional processing time. Protectionism (almost) never is a good idea. The EU sometimes seems like it has a fifth column infiltrated, making decisions so that people become Eurosceptic (that's far from being my case).'

The EU says the import charges aim to give European businesses a fairer chance in trade and commerce. The EU press release states, 'The reform represents a fundamental shift in how goods enter the EU, placing greater responsibility on sellers and platforms.' But many customers remain unconvinced.