The EU is moving forward with plans to impose customs duty on cheap goods in a shift that could hit imports from online retailers and harm a hoped-for London listing by the fast-fashion seller Shein. The potential change comes amid growing disquiet among retailers based in mainland Europe, the UK and the US about rising competition from Chinese-linked marketplaces Shein and Temu, which exploit a loophole that excludes low-value items from import duty.
In the EU, the threshold for the levy is €150 (£127) and in the UK it is £135, enabling retailers such as Shein to ship products directly from overseas to shoppers in those markets without paying any import duty. In the UK, items valued at £39 or less also do not attract import VAT.
Subsidised postage costs in China make it more cost-effective for businesses based there to send cheap goods by air.
A European Commission spokesperson said: “In May last year we put on the table customs reforms for a simple, smarter and safer customs union. What we have proposed now is there is no exemption any more for packages valued at below €150.”
The e-commerce proposal must first be discussed and accepted by the European parliament, which sits again later this month. Last year, 2.3bn items below the duty-free €150 threshold were imported into the EU, according to a report in the Financial Times that highlighted the potential change.
Imports from online retailers have more than doubled year on year to more than 350,000 items in April.
This is an excerpt from the Guardian article.