On February 5, the European Commission announced a major policy adjustment for the cross-border e-commerce industry, planning to cancel the tax-free policy for packages worth less than 150 euros to curb the flood of cheap and potentially unsafe products from outside the EU.
According to the proposal of the European Commission, the previous policy that goods with a value of no more than 150 euros can enter the EU tax-free will be officially cancelled. After the new regulations come into effect, all goods entering the EU, regardless of their value, will be subject to tariffs at rates ranging from approximately 10% to 20%.
Taking a piece of clothing priced at 50 euros as an example, if calculated based on a 15% tax rate, its cost will increase by 7.5 euros. Although the increase may not seem large, it will be a considerable burden for low-priced goods with limited profit margins.In addition to tariffs, the EU also plans to impose a processing fee of 1-3 euros on each parcel entering the EU to cover the cost of managing waste goods. For sellers with a large daily shipping volume, this fee will also be a considerable expense.Industry insiders pointed out that the main purpose of this EU policy adjustment is to ensure that all retailers are under the same competitive conditions and prevent the sale of unsafe products or products that do not comply with EU regulations.However, the policy adjustment has also caused widespread controversy and concern. Many sellers believe that the EU’s move is actually an attempt to use trade protectionism to undermine free trade, targeting Chinese cross-border e-commerce platforms and sellers.“Small Parcels”: EU’s Long-term Regulatory FocusIn fact, the EU has been discussing the cancellation of the 150 euro tax-free policy.
As early as May 2023, the European Commission officially released the proposal "EU Tariff Reform: A data-driven vision of a simpler, smarter and secure customs union", which included plans to remove the current policy of tax-free imports below 150 euros. The introduction of this proposal marks the beginning of the gradual strengthening of the EU's supervision of the cross-border e-commerce industry.
By 2024, the European Union is accelerating the elimination of tax-free policies for goods worth less than 150 euros, while pushing forward plans to impose tariffs on cheap goods. According to data disclosed by the European Commission, 2.3 billion relevant duty-free goods entered the EU market in 2023, mainly due to the rapid growth of Chinese e-commerce platforms.In 2024, this figure surged to about 4.6 billion low-value goods (priced below 22 euros) entering the EU market, equivalent to 12 million parcels entering the EU every day, of which 91% of the goods came from China.The European Commission stressed that cheap imported goods not only create an unfair competitive environment for local EU sellers that abide by the rules, but the transportation of large numbers of parcels also has serious negative impacts on the environment and climate.To this end, the European Commission has previously proposed the following reform priorities:First, it is proposed to impose a handling fee on e-commerce imported goods to make up for the customs supervision costs;Second, continue to urge EU countries to cancel the import tax-free policy for parcels with a value of less than 150 euros;The third is to integrate the customs information of all member states, establish a new EU central customs agency (EUCA), and launch a new measure called "product safety scanning". The implementation of the "product safety scanning" measure will enable EU countries to obtain relevant product information through electronic monitoring tools before the arrival of imported goods, confirm the risk factor of the product, thereby reducing the burden of customs supervision.Industry insiders analyzed that, similar to the abolition of the US T86 policy, if the EU abolishes the tax-free regulations for imported goods below 150 euros, it will have a strong impact on wholesale sellers.Specifically, sellers will have to bear the additional burden of tariffs and value-added tax, and customs clearance procedures will become more cumbersome, which is likely to cause logistics costs to rise, thereby increasing sellers' operating costs. In addition, more complicated customs clearance processes may also lead to longer delivery cycles, adversely affecting customer experience and potentially leading to a decline in order volumes.
