EU and Germany Push for End to Duty-Free Imports

The European Union, alongside Germany, is advocating for the abolition of extensive duty-free imports on inexpensive goods, aiming to foster fairer competition. The focus is particularly on low-cost products from China.

In a bid to combat market distortions, Germany is pushing within the EU for the implementation of tariffs on affordable goods from non-member states. Finance Minister Lars Klingbeil emphasized the need to ensure equitable competitive conditions that protect jobs. He stated that businesses adhering to fair wage practices and regulations should not be at a disadvantage.

During a recent meeting of EU finance ministers in Luxembourg, the reform of the customs union was a key topic of discussion. The proposed changes by Brussels would make previously duty-free goods valued under EUR150 subject to tariffs. Currently, there are no import duties on items below this threshold, with only a few exceptions, such as tobacco and perfumes.

This reform aims to create a level playing field for all traders, regardless of their location. Online marketplaces, including major players like Amazon and Etsy, would be tasked with ensuring that customs duties and value-added taxes are collected during transactions.

The rise of online shopping has led to a significant increase in the number of small, low-value package deliveries entering the EU. Recent reports indicate that the EU is considering a flat fee of up to EUR2 on these orders, in response to the surge in packages from third countries. In 2024, approximately twelve million packages were arriving daily in the EU, which is a marked increase compared to previous years.

Companies such as Temu and Shein, both based in China, are likely to be affected by these new regulations. Temu, which launched in Germany in early 2023, has been noted for its extremely low prices and frequent discounts, often shipping products directly from manufacturers to consumers. Meanwhile, Shein operates as a manufacturer, retailer, and marketplace, allowing it to rapidly respond to fashion trends while minimizing inventory costs and maintaining low prices.