Europe struggles to counter China's e-commerce dominance as new customs rules loom

Starting July 1, the European Union will remove the long-awaited duty-free exemption for parcels valued under 150 euros originating from outside the EU. A 3-euro fee will be applied to each parcel. Despite these changes, industry experts predict that Chinese e-commerce giants like Temu, AliExpress, and Shein will likely bypass the new regulations by utilizing their existing European warehouses.

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Chinese sellers will bypass the restrictions by delivering through European warehouses.

These platforms already operate warehouses within Europe, including Poland, which allows them to deliver goods to customers locally. This strategy means the new EU regulations might not significantly impact their operations or reduce competition for European sellers in the short term. The legal loophole is expected to persist for another two years.

In contrast, the United States abolished its duty-free exemption for parcels from China in August 2025, with a threshold of $800. Within months, the US Treasury reportedly earned over $1 billion from these fees, and parcel volume from China decreased by an average of 30%, initially seeing a 52% drop on Chinese sites.

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Planned customs duties from July on low-value shipments from outside the EU, including China, may partially limit this advantage and signal that the European Union wants to level the playing field. However, it is difficult to expect a breakthrough if new regulations do not cover goods delivered to customers through Chinese platforms' European warehouses.

Experts like Agnieszka Kisielewska from Halcyon.tax suggest that while the new EU rules signal an intent to level the competitive playing field, their effectiveness will be limited if goods shipped through European warehouses remain untaxed. She emphasizes the need to strengthen European e-commerce and ensure equal rules for all market participants, shifting competition towards quality and innovation rather than cost advantages derived from regulatory differences.

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Therefore, it is crucial to further strengthen European and Polish e-commerce and ensure equal rules of the game for all market participants. Only then will competition be based on quality, innovation, and customer service, not solely on cost advantages resulting from regulatory differences.

Damian Siusta of Postis in Poland notes that the regulations might cause short-term disruption as platforms adapt. However, he points out that Temu already operates on a local-to-local model with extensive European warehousing, and AliExpress is likely to follow suit. He anticipates that the influence of Chinese platforms on European markets will continue to grow as long as goods from Asia remain more competitively priced, suggesting that future regulations may not halt this trend.

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Nevertheless, Temu already operates on a local-to-local basis, with an extensive network of warehouses in Europe. AliExpress seems to be a bit behind, but surely in light of the upcoming changes, it will support this model soon.