EU's New €2 Fee on Low-Cost Chinese Imports - Game-Changer for Global E-commerce

EU's New €2 Fee on Low-Cost Chinese Imports: Game-Changer for Global E-commerce

The European Union has unveiled plans to impose a €2 handling fee on billions of small packages imported from China, directly targeting e-commerce platforms like Temu and Shein. This strategic move by Brussels aims to address the unprecedented surge of low-cost imports flooding the European market through the currently exploited "de minimis rule," which exempts goods valued under €150 from import duties.

The scale of this issue is staggering: in 2024 alone, 4.6 billion low-value parcels entered the EU market—doubling the previous year's figures and tripling those from 2022. An overwhelming 91% of these shipments originated from China, with approximately 12.6 million packages entering the EU daily duty-free under the existing exemption.

According to the European Commission's proposal released on May 20, 2025, the fee structure will include a €2 charge per parcel shipped direct-to-consumer, or a reduced €0.50 fee if routed through an EU warehouse first. The Commission aims to implement this measure by the first half of 2026, with a complete repeal of the de minimis rule potentially following in 2027-28.

The timing of this regulatory shift is particularly significant as it follows similar actions in the United States, where former President Trump recently eliminated a comparable duty-free provision for Chinese imports and imposed a substantial 145% tariff. This has already prompted companies like Temu and Shein to announce price increases for American customers beginning April 25, 2025, likely intensifying their focus on the European market.

France, Germany, and Nordic countries have already expressed support for fast-tracking this legislation through the ordinary procedure requiring approval from both the Council and Parliament.

Key Takeaways: Impact on Markets, Retailers, and Consumers

1. Significant Cost Increase for Chinese Platforms: The €2 fee represents approximately 17% of Temu's average EU order value (estimated at €11-13), effectively eliminating their typical 10-15% profit margin. For Shein, with an average order value around €55, the relative impact is smaller , but still substantial considering over 60% of their units ship as single-item packets.

2. Strategic Pivot Expected: Chinese retailers are likely to adapt by bulk-importing goods to bonded warehouses within Europe (paying the reduced €0.50 fee), with early warehouse leases already spotted in Poland and Belgium. This shift creates opportunities for European logistics providers specializing in last-mile delivery.

3. European Retailers Stand to Gain: Companies like Inditex, H&M, and JD Sports may regain price competitiveness, especially in entry-price fashion categories where the competitive gap will narrow.

4. Revenue for EU Budget: The Commission projects approximately €6-7 billion in annual revenue from this fee at full implementation—representing about 0.3% of the EU's Multiannual Financial Framework for 2028-34.

5. Consumer Safety Benefits: The measure addresses mounting concerns about substandard Chinese products failing EU safety standards, including toxic cosmetics, faulty toys, and hazardous appliances that have increasingly been subject to recalls.

Deep Analysis: Broader Implications for Global E-commerce

The €2 fee represents more than just a financial hurdle—it signals a fundamental shift in how Europe approaches cross-border e-commerce regulation. This policy intervention addresses multiple concerns simultaneously: customs overload, product safety risks, environmental impact, and competitive imbalances between European and Chinese retailers.

Financial experts project that this regulatory change will significantly alter market dynamics. Street models currently anticipate over 50% EU GMV CAGR for Temu between 2025-27, but more conservative estimates suggest 30% is more realistic given these new constraints. The fee effectively establishes a higher landed-cost floor for ultra-cheap goods, which will likely accelerate capital expenditure for Chinese platforms as they pivot to establishing EU warehousing operations.

For investors, this creates interesting opportunities. European retail incumbents may experience multiple expansion from approximately 11× to 13× 2026 EV/EBIT ratios as promotional price wars ease. Simultaneously, Chinese platforms face margin compression, with PDD Holdings' international EBIT likely remaining negative until at least 2028.

The environmental justification for the fee also signals Europe's commitment to addressing the climate impact of e-commerce. EU Tech Chief Henna Virkkunen specifically highlighted the "significant environmental and climate damage caused by these shipments" as a key rationale, acknowledging the carbon footprint of single-item airfreight from China to Europe.

Market analysts recommend watching several key catalysts in the coming months: the Parliament rapporteur draft expected in Q4 2025, the Council General Approach anticipated in Q1 2026, large-scale Temu/Shein EU warehouse openings, and PDD's Q1 2025 results on May 27, which may provide the first guidance regarding the fee's impact.

Did You Know?

• The volume of low-cost parcels entering the EU has exploded to 12.6 million packages daily, creating significant logistical challenges for customs authorities.

• Beyond the handling fee, the EU has launched a separate investigation into Shein for potentially violating consumer protection rules under the Digital Services Act, adding further compliance costs related to data-sharing and algorithm audits.

• Brussels is pushing to make platforms like Temu and Shein directly liable for dangerous products sold on their platforms, rather than allowing them to operate merely as intermediaries.

• EU authorities plan to conduct "mystery shopping, testing activities, sweeps and controls" to detect and recall dangerous products imported through these platforms.

• Japanese regulators are studying a similar fee structure, suggesting a potential global trend toward greater regulation of cross-border e-commerce.

• The environmental impact of single-item airfreight is becoming an increasingly important consideration in e-commerce regulation, with the EU specifically citing climate damage as justification for the new fee.

• Logistics incumbents like DHL Group and La Poste are already lobbying for a share of the fee proceeds to offset the additional customs IT infrastructure required.

• The complete elimination of the de minimis exemption, initially proposed two years ago, remains on track but may not be implemented until 2027, making this fee an interim measure to address immediate concerns.

This €2 fee ultimately represents Europe's opening salvo in redefining how digital-first, cross-border commerce is taxed, policed, and decarbonized in an increasingly interconnected global marketplace.