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Why It Could Cost More To Deliver Temu And Shein

The EU is planning to abolish the €150 duty-free limit. Companies such as Temu and Shein would then have to cover the customs costs for their deliveries - the German Ministry of Finance has now commented on the planned change.

Why It Could Cost More To Deliver Temu And Shein
Source: Reuters

In the summer of 2023, the EU first unveiled plans to abolish the €150 duty-free limit. Just over a year later, German Finance Minister Christian Lindner (FDP) is said to have signalled his support for tighter import rules. This was reported by the HDE (Germany’s main retail association, Handelsverband Deutschland ) to Reuters.

According to the lobby organisation, the Ministry of Finance welcomes the EU Commission’s comprehensive reform proposals “to adapt European customs law to the challenges of e-commerce”. If the import rules are indeed changed, it would mainly affect Asian mail-order companies such as Temu and Shein.

According to the EU Commission, in 2023, around two billion parcels were delivered to Europe from third countries without paying duty – including deliveries from Asian online marketplaces Temu and Shein. They offer their goods at extremely low prices and are therefore very popular.

Source: Reuters

For the HDE, the duty-free limit of up to €150 is a lever that Temu and Shein can use to keep prices extremely low. The EU Commission is also critical of the current exemption limit. It fears that retailers could deliberately send their consignments in several parcels in order to stay under the €150 per parcel limit – or directly misrepresent the value of a parcel. It is estimated that around 65 % of parcels are incorrectly declared.

EU plans to cap duty-free: What’s next?

While the HDE and the German Ministry of Finance are in favour of the EU’s import reform plans, another lobby group is critical: E-Commerce Europe, which includes Amazon and Ebay, fears an increase in trade tensions and sanctions from key trading partners such as the US.

In any case, it will be some time before the duty-free threshold is actually abolished. Although the EU parliament approved the customs reform bill in a preliminary vote in March, the legislation will face further scrutiny after the European elections in June – under a new parliament.

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