Cheap Parcel Fees Coming to EU: What Does This Mean for Chinese Giants Like Temu and Shein?
EU Proposes Tax on Temu Deliveries
In a surprising move, the EU Commissioner for Trade, Maroš Šefčovič, has announced a new duty of 2 euros on each parcel worth less than 150 euros entering the EU territory. This decision is primarily aimed at Chinese e-commerce giants like Temu and Shein, whose purchases currently avoid taxation upon entry.
Goods sent to warehouses will be taxed at a lower rate of 0.50 euros. In 2024, the EU received a whopping 4.6 billion low-cost parcels, overwhelmingly from China. According to Šefčovič, this influx creates a significant burden on customs workers, complicating the inspection of incoming goods for safety.
The proposed 2 euro duty is intended to offset the costs associated with processing the high volume of parcels. The EU Commissioner also hopes that some of the collected funds will contribute to the state budget, while protecting the internal market from low-quality and health-endangering products.
Interestingly, in Kazakhstan, Chinese marketplaces are enjoying growing popularity, thanks to their competitive edge against local entrepreneurs, with customs duties not levied on parcels worth up to 200 euros. However, there are now calls in Kazakhstan to consider abolishing this norm.
Similarly, UK authorities are considering the abolition of duty-free exports of cheap Chinese goods, potentially imposing taxes on parcels from Temu and Shein.
Notably, the administration of ex-US President Donald Trump imposed a 120% duty on all imports from China. Their explanation? A measure to combat the illegal import of synthetic drugs into the US.
Brown's Perspective
A casual observer might wonder why the EU is taking this step. By implementing a 2 euro fee on small parcels, the EU aims to reduce the influx of low-value imports that often do not meet European standards. This move could significantly affect Chinese e-commerce companies operating in the EU, increasing their costs and potentially reducing their competitiveness.
China has expressed concerns about fairness and transparency in these trade regulations. With such a significant impact on Chinese e-commerce companies, it will be interesting to see how this decision unfolds.
Meanwhile, the UK's approach to low-cost parcels from Chinese e-commerce platforms remains unclear, as specific duties on low-value parcels are not highlighted in their post-Brexit trade policies. Kazakhstan also lacks clarity on this matter, as customs and trade policies specific to Chinese e-commerce platforms were not found in the research.
- The EU's decision to impose a 2 euro duty on low-value parcels entering the EU could potentially have far-reaching implications for the finance and profitability of Chinese e-commerce giants like Temu and Shein, as it could increase their operational costs.
- As the EU and UK move to regulate low-cost parcels from Chinese e-commerce platforms, the politics of international trade could play a significant role in shaping the future of these businesses, with concerns about fairness, transparency, and safety being key considerations.
