EU may introduce new fees for ultra-low-cost online retailers like Shein and Temu to boost revenue from imports.

Posted: 9:03 AM PST · December 4, 2024

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The European Union’s Crackdown on Ultra-Low-Cost E-Tailers

Image Credits: Costfoto / NurPhoto / Getty Images

Romain Dillet

The European Union is facing a pressing issue with the influx of cheap packages from Asian online retailers, particularly ultra-low-cost e-tailers like AliExpress, Shein, and Temu. The Financial Times has reported that the EU is considering measures to crack down on these imported goods due to concerns over safety and counterfeiting.

The Problem: No Custom Duties for Low-Value Goods

Currently, there are no custom duties imposed on goods worth less than €150. However, the European Commission is not looking to scrap this threshold, as it would be physically impossible to check all packages. In fact, every second, 40 packages arrive in the Netherlands via air or sea freight.

The EU’s Proposed Solutions

Instead of scrapping the threshold, the European Commission is considering two possible solutions:

Per-Package Administrative Handling Fee: Introducing a fee for handling each package could be one way to make it more expensive for importers to bring in cheap goods.
Tax on E-Commerce Platforms’ Revenue: Another option being considered is imposing a tax on the revenue generated by e-commerce platforms, which would likely lead to lengthy negotiations between the Commission, the World Trade Organization, and the bloc’s 27 member states.

The Reason Behind the Crackdown

The EU’s concerns over safety and counterfeiting are not unfounded. Many ultra-low-cost e-tailers have been accused of selling fake or substandard products. By making it more expensive for these importers to bring in cheap goods, the EU hopes to enforce its safety standards and protect consumers.

The Impact on Ultra-Cheap Goods

Taking a tough stance on ultra-cheap goods could be one way for the EU to try to enforce its safety standards. However, this approach is likely to lead to controversy and debates among member states, e-commerce platforms, and importers.

The Global Trade Implications

Any measures taken by the EU would need to be carefully considered in light of global trade agreements and regulations. The World Trade Organization (WTO) would likely need to be consulted, as well as individual member states.

The Pros and Cons of a Per-Package Fee

Introducing a per-package fee could have both positive and negative consequences:

Pros:

Encourages e-commerce platforms to prioritize safety and quality over cheap prices.
Generates revenue for the EU to fund safety inspections and other initiatives.

Cons:

May lead to higher costs for consumers, making online shopping more expensive.
Could drive businesses underground, making it harder to track and regulate imports.

The Way Forward

As the EU weighs its options, it’s essential to balance the need to protect consumers with the potential impact on global trade. Any measures taken should be carefully considered and implemented in consultation with stakeholders across the bloc and beyond.

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