EU plans 2 euro fee for low-value parcels in setback for Shein, Temu
HighlightsThe European Union is proposing a 2 euro handling fee for low-value e-commerce packages to manage the increasing volume of online purchases, particularly from platforms like Shein and Temu. The European Commission plans to remove the duty-free treatment for low-value consignments by 2028, amidst concerns from European retailers about unfair competition from non-European online retailers. The proposed handling fee aims to cover the compliance costs associated with ensuring that a significant number of packages meet European Union regulations, with the fee being charged to online retailers rather than consumers.
The European Union is set to propose a 2 euro ($2.27) handling fee for low-value e-commerce packages coming into the bloc, as it struggles to deal with the billions of goods sold by online platforms such as
Shein
and Temu to European consumers.
EU customs authorities handled some 4.6 billion low-value packages bought online in 2024, 91% of them coming from China and a doubling from 2023.
The European Commission in February said it would remove the duty-free treatment of low-value consignments worth no more than 150 euros, but not until 2028. The Commission also said it would explore the possibility of an e-commerce handling fee.
The fee needs approval from EU governments, which have not yet discussed it, and the European Parliament. France called for such a measure last month.
The EU executive said the fee would cover work to ensure compliance of the huge number of parcels with EU rules, such as for toy safety, and would be incurred by the online retailer, rather than by customers.
"With 4.6 billion packages, you can't really have proper controls and to introduce it costs a lot of money and therefore it's fair to ask Alibaba, Temu or Shein to pay their fair share of the cost," Bernd Lange, chair of the European Parliament's trade committee, told reporters on Wednesday.
Alibaba, Shein, and Temu did not immediately respond to a request for comment.
China's foreign ministry said it hoped the EU would abide by its commitment to openness and "provide a fair, transparent and non-discriminatory business environment for Chinese firms".
The Commission has put forward a proposed 2 euro handling fee per parcel delivered directly to the customer or a smaller 50 cent fee for parcels handled by a warehouse within the EU.
The United States this month scrapped its "de minimis" policy that allowed duty-free entry to parcels worth less than $800.
European retailers say the existing duty-free policy gives Shein and Temu an unfair advantage.
Online retailer Zalando, which sells branded clothes in 25 European countries, told Reuters it welcomed the fee proposal, but said the removal of the customs exemption threshold should be fast-tracked.
The handling fee "could be part of the solution to remedy the unfair competition from Temu and others," said Stephan Tromp, deputy managing director of German retail association HDE. "At the same time, the duty-free limit of 150 euros must be abolished."
Polish ecommerce company Allegro called the fee a "step in the right direction" but said the details of its implementation will be crucial.
For example, the lower 50-cent fee for goods handled by warehouses in the EU might ultimately favour global companies with large logistics operations while small businesses will have to pay the 2-euro fee, Ewelina Stepnik-Godawa, regulatory affairs manager at Allegro, said in an emailed comment to Reuters.
Europe's biggest fast-fashion retailer, Zara owner Inditex, declined to comment on the fee plan.
In a BBC interview earlier this month, Inditex CEO Oscar Garcia Maceiras backed the removal of the duty-free policy to ensure a "level playing field" with the same rules for all competitors.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Mint
19 minutes ago
- Mint
Trump wants cheaper drugs like Europe has. How it works.
President Donald Trump doesn't just want to bring down prescription drug prices for Americans. He wants European countries to raise them to make up the revenue that drugmakers would lose from his policy. Trump is proposing a so-called most-favored-nation pricing model, which would set U.S. drug prices at the lowest level in other wealthy countries. But the pharmaceutical industry isn't buying into tying drug prices in the U.S. to prices in Europe—at least not knowing the details of the president's proposal. More details about the government's pricing model could come this week. On May 12, Trump directed government health officials to benchmark drug prices to international standards within 30 days. The lobbying group PhRMA, with members including U.S. pharma giants Eli Lilly, Pfizer, Johnson & Johnson, and AbbVie, has argued there are two reasons why U.S. drug prices are high: foreign countries not paying 'their fair share" for medicines, and middlemen such as pharmacy-benefit managers. Today, U.S. drug pricing is largely market driven. It involves negotiations between drug manufacturers, pharmacy-benefit managers, healthcare insurers and providers. European countries do it much differently. Each has its own way of determining drug prices, but most follow one of two broad approaches. The first approach, which Germany and France use, considers the overall clinical effectiveness of a new medicine. How does the new treatment compare to existing ones? Does it have added therapeutic benefits? If the new drug is substantially better, its price would reflect that. A second approach, used by the U.K., the Netherlands, and Sweden, analyzes cost effectiveness. This model not only compares the new drug to existing ones but also assesses the incremental value that the medicine brings to the health system. After the assessments, negotiations between drugmakers and the countries begin. Because many European countries have national health systems, they are in a strong negotiation position. If government negotiators think a medicine is too expensive for its effectiveness, they won't recommend its use. How Trump's MFN policy would work in practice isn't clear. Drug prices would probably be based on list prices in Europe since the prices paid by national health systems, or net prices, are confidential. The president's open-ended directive, laid out in an executive order, has many wondering how the U.S. could raise prices in Europe. Trump has made clear he wants to close the gap between U.S. and international prices, and has suggested he would use tariffs and export controls to achieve his goal. In theory, drugmakers could set list prices higher in Europe as long as it doesn't affect net prices, health policy expert Dr. Huseyin Naci told Barron's. In the U.K., for example, a higher list price could still lower the prices in other European countries. 'So that would still not be an acceptable approach to many other European countries," said Naci, who is associate professor of health policy at the London School of Economics. Overhauling Europe's decades-old pricing approaches would require fundamental changes to their pricing regulations—and there will be 'little appetite or ability" to alter them, Naci added. Cost is another complicating factor. 'Pharmaceutical spending is already one of the top categories of spending in many countries in terms of healthcare expenditure, so there's little room to accommodate higher prices and spending for pharmaceuticals in Europe," according to Naci. How Trump is planning to make Europeans pay more for drugs is the big question. He could use tariffs and trade negotiations as leverage. In early April, the president said a 'major" tax on pharmaceutical imports is coming 'very shortly," however nothing has been announced yet. In a trade agreement with the U.K. a month later, there is a provision on pharmaceuticals that states the U.K. will 'endeavor to improve the overall environment for pharmaceutical companies." What that means in practice still isn't clear. Write to Elsa Ohlen at
&w=3840&q=100)
Business Standard
21 minutes ago
- Business Standard
No disruption in operations due to rare earth supply crisis: Maruti
Automaker says situation is 'uncertain and evolving' amid report that it has made e-Vitara production cuts Deepak Patel New Delhi Maruti Suzuki India (MSIL) said on Thursday its operations are unaffected by the global rare earth magnet shortage, but added that the situation is 'uncertain and evolving'. The company said it is exploring multiple solutions to maintain continuity in operations and will notify stakeholders if any material impact arises. The clarification comes amid a Reuters report earlier this week stating that the country's largest carmaker has slashed production estimates for its upcoming electric SUV, the e-Vitara, by nearly two-thirds due to rare earth supply constraints. According to the report, MSIL has revised its production target for the e-Vitara from 26,000 units to just 8,200 units for the first half of FY26. The report, citing internal documents, attributed the change to 'supply constraints' of critical rare earth elements, particularly magnets used in electric powertrains. Despite the scale back, MSIL reportedly aims to meet its full-year target of 67,000 units by ramping up production in the second half of the financial year. 'Regarding the situation on rare earth, as of now there is no disruption in our operation due to this issue,' said a MSIL spokesperson, in a statement on Thursday. 'There is a lot of uncertainty and the situation is continuously evolving. We are monitoring the situation and pursuing multiple solutions to ensure continuity in our operations. If and when there is any material impact to our business, we will inform all stakeholders in line with regulatory requirements,' the spokesperson added. Rare earth magnets are a crucial component in electric vehicle (EV) motors and are also used in power steering systems, speakers, and other car components. Their shortage stems from China's decision in April to tighten export controls on key rare earth elements, including neodymium, dysprosium and terbium. These elements are essential in the production of permanent magnets used in EVs. According to the Federation of Automobile Dealers Associations (FADA), electric car sales in India reached 107,645 units in fiscal year 2024–25, up from 91,506 units in FY24, marking a 17.7 per cent year-over-year increase. China controls more than 90 per cent of the global rare earth magnet supply chain. China's new export rules require companies to obtain end-use certifications and licences, which has slowed shipments and created uncertainty for automakers worldwide. The disruption has raised alarm in India's automotive industry, especially among EV manufacturers who depend heavily on Chinese supplies. The Indian government is monitoring the situation. A delegation may soon travel to China to expedite clearances for shipments stuck due to regulatory bottlenecks. Additionally, the government is evaluating measures such as incentivising domestic rare earth magnet production and expanding recycling initiatives. The rare earth crunch comes at a time when Indian automakers are stepping up EV production to meet future emission targets and global demand.
Time of India
21 minutes ago
- Time of India
Rare earth magnets: Maruti Suzuki explores multiple options to ensure operational continuity
Maruti Suzuki India on Thursday said it is exploring multiple solutions to ensure continuity in its manufacturing operations amid the ongoing rare earth magnet shortage issue. The country's largest carmaker noted that there is a lot of uncertainty due to the situation, but so far, there is no impact on its manufacturing activities. "Regarding the situation on rare earth, as of now there is no disruption in our operation due to this issue. There is a lot of uncertainty and the situation is continuously evolving," the car market leader said in a statement. It further said, "We are monitoring the situation and pursuing multiple solutions to ensure continuity in our operations." If and when there is any material impact to the company's business, the automaker will inform all stakeholders in line with regulatory requirements, Maruti Suzuki India stated. Live Events MORE STORIES FOR YOU ✕ Rare earths roadblock: India's automakers await China's nod for magnet talks Rare earths are not rare: Chinese move can backfire US, China reach deal to ease rare earths export curbs, keep tariff truce alive « Back to recommendation stories I don't want to see these stories because They are not relevant to me They disrupt the reading flow Others SUBMIT Domestic auto industry is forced to take steps as the Chinese government has put restrictions since April 4 on the export of rare earth elements and related magnets. China has mandated special export licences for seven rare earth elements and related magnets. The country controls over 90 per cent of global processing capacity for the magnets, used across sectors including automobiles, home appliances and clean energy. With no clarity on approvals, the Indian automobile industry is staring at production issues, especially for electric vehicles . The domestic automobile industry has also sought government support in expediting approvals from the Chinese government for importing rare earth magnets . The critical materials include samarium, gadolinium, terbium, dysprosium and lutetium, which are essential in electric motors, braking systems, smartphones and missile technology. Rare earth magnets are integral to permanent magnet synchronous motors (PMSMs) used in EVs for their high torque, energy efficiency and compact size. Hybrids also depend on them for efficient propulsion. In internal combustion engine (ICE) vehicles, the use of rare earth magnets is largely limited to electric power steering and other motorised systems.
