The EU wants to charge a €2 "toll" for Chinese small packages, creating obstacles.

Small parcels seem to be under siege worldwide.

On May 20th local time, the European Union proposed a draft: a fixed fee of 2 euros per piece will be levied on small parcels mailed to individual consumers, but a lower fee of 0.5 euros will be charged for goods sent to EU warehouses.

European Union Trade Commissioner Šefčovič said that these fees will be borne by the platforms to address the challenges brought by the influx of a large number of cheap goods.

Currently, small parcels with a unit price below 150 euros can enter the EU duty - free, which is an important channel for cross - border sellers to sell to the EU market. Data shows that a total of 4.6 billion such parcels entered the EU in 2024, averaging more than 145 per second, of which 91% were from China. The EU expects this figure to rise.

If this policy is officially implemented, it will undoubtedly deal a blow to the European direct - mail small - parcel market. Previously, due to the US cancellation of duty - free for small parcels, many cross - border sellers chose to explore the European market. Data shows that compared with April, in the first 12 days of May, the advertising expenditures of Temu and Shein in Europe increased by 40% and 30% respectively.

"I don't know where else to go," said a dejected seller. In recent months, several tariff reversals brought by the US have made the cross - border e - commerce industry turbulent, and direct - mail small parcels may be the most affected.

01 Will the duty - free policy for EU small parcels come to an end?

This proposal to levy a fixed tariff is regarded as a preliminary step for the EU to completely cancel the duty - free policy for small parcels.

In February this year, the European Commission proposed to cancel the 150 - euro duty - free threshold established in 2010, requiring all imported goods (regardless of value) to pay tariffs, and each parcel may be charged 1 - 3 euros.

At the same time, to strengthen the control of imported parcels and prevent "dangerous products" from entering the market, e - commerce platforms are also required to submit detailed product information (such as ingredients and safety certifications) in advance to ensure that the products meet EU safety standards and undergo a complete customs inspection.

This policy involves 27 EU countries and needs to go through multiple reviews. It is expected to be officially implemented after 2028.

Therefore, cross - border sellers did not have too many concerns about the cancellation of duty - free for small parcels before. "With millions of parcels every day, even if the customs officers were exhausted, they couldn't inspect them all. Moreover, the tax collected wouldn't even be enough to hire people," said a seller.

The EU has also realized this problem. Šefčovič said in this proposal that the huge number of parcels has brought a "heavy burden" to customs officers. Therefore, "I wouldn't consider the fixed handling fee as a tax, but just a cost compensation."

Obviously, the EU simply doesn't have the ability to inspect all small parcels and calculate the tax rates. Therefore, adopting a one - size - fits - all approach to collect a fixed tax will be a better choice. The 2 - euro pricing is not much different from the tariff currently imposed on small parcels in the US: basically, the cost also increases by 1 - 2 US dollars per piece.

Meanwhile, the lower tax rate for parcels sent to warehouses also encourages sellers to use warehouses more. "It's much easier for customs to inspect samples from a batch of goods than to inspect individual items," said a lawmaker.

Currently, the time to impose the additional 2 - euro tariff has not been determined, but it is inevitable. The European Commission said that it supports starting customs reform next year instead of waiting until 2028. The fixed handling fee is only a temporary measure until the newly revised customs rules cancel the duty - free policy for parcels below 150 euros.

EU countries are also quite enthusiastic about canceling the duty - free policy for small parcels. For example, France said in April that it hopes to start charging a handling fee for each parcel from non - EU online sellers before 2028.

Moreover, France even wants to collect taxes in advance independently. Previously, French Budget Minister Monchalin clearly stated that France plans to start charging a fixed handling fee of a few euros for each imported small parcel as early as 2026. According to the estimate of the French Ministry of Finance, it is expected that 800 million small parcels will enter France in 2024.

It is worth noting that the UK is also accelerating the formulation of this policy. On April 25th, it announced that it would re - evaluate the duty - free policy for small parcels worth less than 135 pounds, aiming to solve the problem of unfair competition between international e - commerce platforms such as Temu and local retailers.

Industry insiders analyzed that tariffs, value - added taxes, and handling fees may increase the cost of low - price goods by 10% - 30%, weakening the price competitiveness of Chinese products.

02 Localization is inevitable

Affected by the high tariffs in the US, platforms such as Temu and many sellers have turned their attention to the European market.

"The uncertainty risk in the US is too high. We won't focus on it anymore. We're going to invest more resources in Europe, Southeast Asia, and other regions of the world," a 3C electronics seller once told BrandsFactory.

The platforms have acted more quickly. Shein and Temu have already carried out more intensive marketing activities in Europe. Data from market intelligence company SensorTower shows that compared with April, both Shein and Temu increased their advertising expenditures in Europe, with an increase of 40% and 30% respectively in the first 12 days of May.

This was their expansion strategy in the US in the past. For example, Temu spent millions of dollars on the Super Bowl advertisement in 2024. These advertisements quickly gained wide recognition for the platform among consumers. In that year, the Temu app was downloaded 86 million times in the US, ranking first among all e - commerce platforms.

Now, the advertising campaigns are also quite effective. A Temu seller said that the number of orders from Europe has increased. In May, the number of European orders was 3 - 4 times that of other non - European and non - American regions in the world, a 160% increase compared with the same period in April.

However, if the duty - free threshold is cancelled, the costs of cross - border sellers will inevitably rise significantly. An industry insider said that if the cost of a product increases by 2 euros, it's almost impossible for products below 30 euros to make a profit.

The threshold for the European e - commerce market is already higher. Since it consists of multiple countries, the market is relatively fragmented. Coupled with various compliance protection policies, sellers need to spend a lot of resources and energy to navigate between different platforms and markets, making it difficult to quickly open up the situation. "Europe is not a unified market. The requirements are high, and it's less attractive than the US," said a seller bluntly.

Therefore, the costs borne by cross - border sellers in the European market are already very high. "The value - added tax, service fees for compliance, and platform commissions already exceed 50%," a seller told BrandsFactory.

If an additional 2 - euro tariff is added, many sellers won't be able to continue. The EU Market Directorate General also predicts that after taxing non - EU small parcels, the annual tax revenue can increase by 2.4 billion euros, but it may cause 30% of e - commerce sellers to exit the market.

Localized layout may be inevitable. For ordinary sellers, replacing direct - mail transportation with "small - parcel consolidation + pre - warehousing" will be a more feasible solution to compress the single - piece logistics cost.

As for Temu, it is vigorously recruiting local European merchants, establishing a local fulfillment system, and developing its "local - to - local" business model, that is, local merchants deliver goods to consumers locally. Temu expects that 80% of its total European sales in the future will come from this model.

As the policy on small parcels tightens day by day, sellers in a difficult situation can only actively look for a way out.

This article is from the WeChat official account "BrandsFactory", author: Chen Ting.