EU abolishes de minimis exemption, imposes €3 duty on low-value imports

Today, 1 July, the European Union (EU) ended its longstanding de minimis exception, which allowed for goods valued under €150 to enter the bloc duty-free. Such goods will now incur a flat €3 customs duty until 1 July 2028, after which they will be subject to standard tariffs.

De minimis – Latin for ‘too small to matter’ – was adopted in 2006 to reduce administrative burdens, as low-value shipments were relatively infrequent then and processing them through paper-heavy customs procedures imposed disproportionate costs on customs authorities. 

However, according to the European Commission, the digitisation of customs procedures and the growing popularity of electronic commerce (e-commerce) mean the exemption no longer accounts for market reality. The number of low-value parcels entering the EU surged from 1.3 billion in 2022 to 5.9 billion in 2025, with 90% coming from China. Online marketplaces such as Shein and Temu made up a significant proportion of this, creating unfair competition for EU businesses subject to local labour, taxation, environmental, and product-safety regulations. 

Trade Finance Global (TFG) heard from Mike Parra, CEO of DHL Express Europe. “While the introduction of a €3 duty on low‑value shipments is intended to strengthen compliance and create a more level playing field, it will inevitably increase the complexity and cost of moving goods, particularly for high‑volume e‑commerce flows,” he said.

A 2025 study by the Finnish Commerce Federation revealed that in 2024, Finland received €29.4 million in tax revenue from e-commerce goods entering from outside the EU. If the same amount of purchases were made from domestic stores, the country would have made €324.2 million – 11 times that revenue.

“Tax losses arise when consumers bypass the costs of domestic labour and business by buying products from Chinese online stores that do not pay labour taxes or companies’ corporate taxes to Finland,” explained Jaana Kurjenoja, Chief Economist of the Finnish Commerce Federation.

On the other hand, the recent development “will inevitably increase the complexity and cost of moving goods, particularly for high‑volume e‑commerce flows,” said Parra. 

“We do expect some short‑term impact on low‑value e‑commerce volumes as retailers, platforms and consumers adjust. However, global trade is highly resilient, and we anticipate that businesses will respond by optimising their supply chains, improving data quality, and evolving their fulfilment models to continue serving EU customers effectively,” he added.

Social and environmental standards

Fast fashion brands, most notably Shein, are notorious for their unfair labour practices. A 2022 documentary by Channel 4 revealed that workers across Shein’s supply chains worked over 16 hours a day and were paid only £0.03 per item. The BBC also reported that workers in Panyu – also known as ‘Shein village’ – were working 75 hours weekly. Many brands sourcing Chinese cotton rely on systematic forced labour affecting Uyghur minority groups as well. 

Such brands have also historically bypassed the environmental requirements that EU producers are subject to. The carbon footprint of fast fashion is 11 times that of traditional fashion. Most fast-fashion manufacturing takes place in China and India, but the EU, the UK, and North America dominate global consumption. 

Recent initiatives like the EU’s Carbon Border Adjustment Mechanism (CBAM) are increasingly levelling the playing field of environmental regulatory adherence. Initially, packages under €150 were fully exempt from CBAM reporting. To prevent the exploitation of this loophole, the EU changed the rules so that the exemption is weight-based rather than price-based, freeing importers bringing in less than 50 tonnes of carbon-intensive goods per year from the rule. This means that commercial e-commerce giants are now burdened by CBAM. However, everyday online shopping remains exempt. 

Yet, the de minimis exception’s abolishment imposes taxes on manufacturers exporting to the EU, who previously had an unfair advantage over EU manufacturers constrained by advanced environmental regulation. 

The EU’s Forced Labour Regulation is also expected to come into effect on 14 December 2027, banning products made with forced labour from being sold in the bloc’s market, regardless of where it was made. 

The new initiative aims to increase traceability as well. From today onwards, product identifiers (PIDs) – which aim to spot and block non-compliant items – can be declared voluntarily. From 1 November 2026, they will be mandatory.