Listen: Who will benefit from the new €3 tax on small parcels?

Production: By Europod, in co-production with Sphera Network.

EUobserver is proud to have an editorial partnership with Europod to co-publish the podcast series “Briefed” hosted by Léa Marchal. The podcast is available on all major platforms.

Find the full transcript below:

If you sometimes order products from Temu, Shein or AliExpress, your next order might soon cost a little more.

Because from Wednesday (1 July) onwards, the European Union is introducing a new €3 customs duty on low-value parcels entering the bloc from outside the EU.

Who will benefit from this tax?

Last year alone, 4.6 billion small parcels worth less than €150 entered the European Union. That’s more than 145 parcels every second. And 91 percent of them came from China. All of them duty-free.

Why? Simply because low-value parcels worth less than €150 are exempt from customs duties.

From an economic point of view, these small parcels allow consumers across the continent to access goods at very low prices.

You may already have ordered a lamp, a phone holder or maybe some clothes online for a very low price.

For European retailers, this is clearly unfair competition. For the environment, it’s a disaster, because low prices encourage unnecessary consumption.

That’s why the EU wants to restore some balance and impose duties on the smallest parcels.

Every low-value shipment entering the EU will now be subject to a fixed €3 customs duty.

How will it work? The duty will not apply to the parcel itself, but to the different product categories it contains.

Let me give you an example. If you place an order for three identical T-shirts, that’s one product category, so you’ll pay a single €3 duty.

But if your order contains a T-shirt, a pair of shoes and a bottle of shampoo, those are three different categories, meaning the customs duty would total €9.

But is this tax payable by you, on top of VAT and shipping fees?

Not really.

In theory, sellers and retailers pay the tax, not consumers. But they are free to pass the cost on to customers by increasing the price of their products.

So, in that sense, you could end up paying more for some orders.

However, for many Chinese sellers, this is not an ideal solution because some of their products cost even less than €3, and those products are at the core of their business model.

This means some companies might choose to absorb part of the new tax and accept lower profits in order to remain competitive.

A third option, which is already becoming more common, is for companies to ship products in bulk to warehouses inside the EU rather than sending millions of individual parcels directly from China. Once the goods are already inside Europe, deliveries to customers are treated as domestic shipments, avoiding this new customs duty altogether.

Now, how much will this benefit European producers?

A €3 charge will not eliminate the price gap between European and Chinese sellers overnight.

But it does reduce one of the advantages enjoyed by foreign sellers and should make competition slightly fairer for European shops.

For example, as a consumer, you might switch to a European retailer if the price difference is no longer that significant.

One last effect is the revenue generated by the tax. Who will get it?

National customs authorities will collect the money and use it to cover the huge administrative and customs costs generated by these imports.

If we use last year’s import figures as a rough guide – 4.6 billion parcels – and assume each shipment generates at least one €3 customs duty, customs authorities across the European Union could collect around €13.8bn per year.

In reality, the amount could be even higher because parcels containing several different product categories may incur multiple €3 charges.

This new tax is temporary. From 2028 onwards, the EU plans to introduce a brand new customs system with a more precise tariff structure.