EU eliminates customs exemption for low-value imports from China

EU Finance Ministers reached agreement on November 13, 2025, to eliminate the bloc's customs duty exemption for parcels valued under €150, according to statements from European Commission President Ursula von der Leyen and French Finance Minister Roland Lescure. The decision accelerates implementation of customs reforms originally scheduled for 2028, with member states now targeting early 2026 for the policy to take effect.

The exemption currently allows packages worth less than €150 imported directly to consumers to enter the 27-nation bloc without customs duties, though value-added tax still applies to these shipments. This policy has enabled the growth of Chinese-founded e-commerce platforms like Shein and Temu, which built business models around shipping individual parcels directly to European consumers below the duty threshold.

Von der Leyen announced the decision on social media platform X, stating that "from now on, all parcels will go through standard customs procedures." She characterized the policy change as essential to "better manage the surge in small packages, particularly from China" while ensuring "fair competition, stronger enforcement, and better consumer protection across the EU."

The European Commission reported that approximately 4.6 billion low-value parcels entered the EU in 2024, representing more than 12 million packages daily. According to commission data, over 90 percent of these shipments originated from China. This volume represents a substantial increase from previous years, driven primarily by direct-to-consumer e-commerce platforms that offer ultra-low prices on clothing, electronics, and household goods.

France advocated strongly for accelerating the timeline beyond the original 2028 implementation date proposed earlier in 2025. Lescure told AFP that France's efforts to reach earlier agreement had "paid off," describing the decision as "a key step for the protection of European consumers and the internal market to fight more effectively to prevent dangerous products and those that do not comply with our European regulations entering."

The French minister added that "we have taken a major step for the economic sovereignty of the European Union," linking the customs policy to broader concerns about manufacturing competitiveness and regulatory control.

EU trade spokesman Olof Gill confirmed the bloc's focus on addressing exponential growth in e-commerce shipments during the November 13 ministerial meeting. Gill told reporters that "we've seen exponential growth in e-commerce in recent years – 4.6 billion parcels were imported into the EU last year, and recent figures confirm this upward trend."

The 27 member states committed to developing "a simple, temporary solution to enable earlier implementation," according to an EU official who spoke following the Economic and Financial Affairs Council meeting. Ministers plan to discuss and formally approve specific implementation proposals during their next meeting on December 12, 2025.

Beyond eliminating the duty exemption, the European Commission proposed in May 2025 a handling fee worth €2 per small package. EU member states have not yet reached consensus on the fee's final amount, though officials indicated they expect implementation to begin in late 2026. This fee would apply separately from any customs duties imposed on the shipments themselves.

Several member states moved forward with their own national measures while waiting for bloc-wide action. Romania implemented a five-euro fee on small parcels prior to the EU-wide agreement. France advanced legislation through its Senate to impose a €2 levy on low-value fashion imports, with potential expansion to €5 and ultimately €10 per package by 2030, depending on environmental impact considerations.

French Budget Minister Amélie de Montchalin explained in an April 29, 2025 speech that the proposed French levy would "advocate for the rapid introduction of an administrative fee mechanism on every small package entering Europe" ahead of the planned 2028 Customs Union reform.

The customs policy changes address multiple concerns articulated by European regulators and industry groups beyond simple trade competitiveness. The European Commission's May 2025 report stated that low-value imports "raising numerous concerns" including products that undercut European production standards, often contain counterfeit goods, and have a "negative environmental and climate footprint."

Product safety represents a significant regulatory justification for the policy change. The French government moved to suspend Shein's marketplace operations in France on November 6, 2025, after government officials identified child-like sex dolls and banned weapons available for purchase through third-party sellers on the platform. French Foreign Minister Jean-Noël Barrot stated in a Franceinfo radio interview that "the platform is evidently in breach of European rules" and called on the European Commission to "take action. It cannot wait any longer."

Danish Economic Affairs Minister Stephanie Lose praised the November 13 agreement, stating "we [will] ensure that duties are paid from the first euro, creating a level playing field for European businesses and limiting the influx of low-cost goods." Lose emphasized that member states "also agreed on the need to work towards a temporary solution as soon as possible in 2026."

The timing of the EU's decision follows similar policy changes in other major markets. The United States eliminated its de minimis exemption through executive order on July 30, 2025, ending duty-free treatment for shipments valued under $800. That policy change particularly targeted Chinese e-commerce platforms, which President Donald Trump's administration accused of using the exemption for "escalating deceptive shipping practices, illegal material, and duty circumvention."

Temu's withdrawal from U.S. advertising in April 2025 demonstrated the vulnerability of business models dependent on duty-free import status. The platform drastically reduced its Google Shopping advertising spending after U.S. tariff increases, with app performance metrics collapsing following the advertising pullback.

The policy shift creates substantial operational implications for platforms that built logistics networks around individual parcel shipments. Maros Šefčovič, who serves as the European Commission's commissioner for trade and economic security, stated in remarks following the November 13 meeting that abolishing the exemption would deliver "a strong signal that Europe is serious about fair competition and about defending the interests of its businesses."

Šefčovič noted that "European business, particularly retailers, have repeatedly stressed the need to remove this distortion of competition without delay. This is not a technical issue—it is a question of Europe's capacity to defend its economic interests."

The commissioner emphasized that the European Commission and Financial Affairs Council would work with member states to deliver "a pragmatic, temporary solution that can be implemented as early as possible," while insisting that technical implementation challenges should not prevent the EU from collapsing its de minimis provision.

Australian regulatory analysis found that 72 percent of consumers encountered potentially unfair practices on online retail marketplaces including Shein and Temu, with concerns extending to hidden charges, fake reviews, and product safety issues. That March 2025 survey examined over 3,000 Australian consumers' experiences with major online retail platforms.

The European Commission has not published detailed estimates of revenue the new customs duties might generate for member states. The French government forecasted that its proposed €2 national levy on small parcels could raise €500 million by the end of 2026, suggesting substantial potential revenue from EU-wide customs duties on previously exempt shipments.

Neither Shein nor Temu provided public comment following the November 13 announcement, though both companies have previously worked to expand their market share in the European Union. Shein opened its first physical store in Paris in late 2025, while Temu released its first transparency report on November 30, 2024, detailing content moderation practices after achieving designation as a Very Large Online Platform by the European Commission.

The EU Council's statement noted that nearly two-thirds of small parcels inbound to the EU "are undervalued to avoid customs duties," raising concerns about both competitiveness for European retailers and accurate customs revenue collection. This practice of declaring artificially low values for customs purposes represents a separate enforcement challenge from the duty exemption itself.

Traditional retail channels face duties ranging from 15-32 percent of product value when importing comparable goods from China, creating significant cost disadvantages compared to direct-to-consumer platforms utilizing the duty exemption. Industry representatives have argued that this disparity undermines European manufacturers and retailers who compete with the same product categories.

The European Commission emphasized that the policy change would require all parcels to undergo "standard customs procedures" regardless of declared value. This represents increased administrative workload for customs authorities, who will need to process millions of additional declarations daily once implementation begins.

Kentucky's July 2025 lawsuit against Temu alleged extensive data collection practices and intellectual property infringement, highlighting broader regulatory scrutiny facing Chinese e-commerce platforms beyond customs and trade policy. Multiple jurisdictions have raised concerns about data security, counterfeit goods, and consumer protection issues associated with rapid growth of these platforms.

The provisional implementation timeline suggests the EU aims to have new customs procedures operational by March 2026, though final approval during the December 12 ministerial meeting may adjust this target. Member states must coordinate technical systems for processing the additional customs declarations while maintaining efficiency for commercial importers and logistics providers.

Timeline

• April 29, 2025: French Budget Minister Amélie de Montchalin announces plans for national levy on small packages
• May 2025: European Commission proposes €2 handling fee on small packages, originally scheduled for 2028 implementation
• July 30, 2025: United States eliminates de minimis exemption through executive order
• November 6, 2025: France moves to suspend Shein marketplace over prohibited products
• November 13, 2025: EU Finance Ministers agree to eliminate €150 customs exemption
• November 30, 2024: Temu releases first EU transparency report after Very Large Online Platform designation
• December 12, 2025: EU ministers scheduled to formally approve implementation proposal
• Early 2026: Target implementation date for elimination of customs duty exemption
• Late 2026: Expected implementation of EU-wide package handling fee

Summary

Who: EU Finance Ministers from all 27 member states, European Commission President Ursula von der Leyen, Commissioner for Trade and Economic Security Maros Šefčovič, French Finance Minister Roland Lescure, and Danish Economic Affairs Minister Stephanie Lose reached the agreement. The policy primarily affects Chinese-founded e-commerce companies Shein and Temu, along with European consumers and retailers.

What: The EU agreed to eliminate its customs duty exemption for parcels valued under €150, requiring all imports to undergo standard customs procedures and pay applicable duties. The bloc also plans to implement a separate package handling fee in late 2026. This replaces the current system that allowed low-value parcels to enter duty-free, though VAT remained applicable.

When: The decision was announced on November 13, 2025, with formal approval scheduled for December 12, 2025. Implementation is targeted for early 2026, accelerating the original 2028 timeline by approximately two years. The package handling fee would follow in late 2026.

Where: The policy applies across all 27 European Union member states, affecting shipments entering any EU country. Individual nations like France and Romania have also implemented or proposed their own national measures. The policy primarily targets imports from China, which account for over 90 percent of the 4.6 billion low-value parcels that entered the EU in 2024.

Why: European officials cited the need to address unfair competition for European retailers, prevent dangerous and non-compliant products from entering the market, reduce environmental impacts from disposable fast fashion, and establish economic sovereignty. The policy responds to exponential growth in low-value e-commerce shipments, rising from previous levels to 12 million packages daily, with concerns about undervalued declarations, counterfeit goods, and circumvention of product safety regulations.