De minimis end goes global as EU, UK and Japan tax small parcels

The duty-free parcel era is ending

For about ten years, cross-border e-commerce depended on one quiet assumption. Customs authorities in rich markets would not bother taxing or inspecting very cheap parcels. That assumption is now collapsing across the four largest consumer markets that Chinese platforms serve. The United States, the European Union, the United Kingdom and Japan are all ending duty-free treatment for low-value e-commerce shipments. Brazil is moving the other way and has reopened its door28. The live issue is no longer whether a small parcel pays. It is who files the declaration, what data goes on it, and which warehouse the parcel ships from28.

The four markets are moving at different speeds and with different tools. Viewed together, though, the policy direction is settled. The low-value parcel is becoming a normal import, and the business model built on it, which shipped goods straight from a Chinese factory to a Western doorstep, is being pushed into local warehouses.

The US: the template, and the price shock

Washington moved first and hardest. Goods from China and Hong Kong lost the $800 exemption on May 2, 2025. A July executive order then ended it for every other country, citing false invoices and deceptive packaging used to hide drugs1. The global suspension took effect on August 29, 20256.

The policy also survived a major legal challenge. On February 20, 2026, the Supreme Court ruled that the emergency-powers statute behind many of Trump's tariffs does not allow a president to impose them. The same day, the president signed an order keeping the de minimis suspension in place1. CBP then wrote the indefinite suspension into its own regulations on June 24, 20267. A new postal informal-entry process followed on July 247. Under the One Big Beautiful Bill Act, the statutory repeal arrives on July 1, 20276. In practice the US exemption has been closed through executive action, regulation and legislation, so there is little legal route back to duty-free small parcels.

Accounts of the price effect broadly agree on direction but vary in size. CNBC checkout tests in late April 2025 found Temu adding import charges of 130% to 150% on goods shipped direct from China7. A $18.47 dress, for example, came to $44.68 at checkout6. Reuters' tracking of Shein showed a smaller and more gradual rise. A low-cost apparel sample was 12.5% higher by late May 2025, and a sample of pricier women's garments was 23% higher by July7. The gap matters. The triple-digit surcharges were mostly temporary, appearing just before the deadline on China-direct listings. The lasting effect was a shift in where goods are stored and shipped from.

The behavioural response was large. Parcels under $800 entering the US fell 54% in the four months after the August 2025 change8. Temu's US audience fell as much as 62% at its low point and Shein's 47%. Both were still about 30% below their earlier baselines in April 20269. Shein's US revenue fell about 14% in early 2026, and its cost to deliver each order rose to $17.901.

The burden on households is uneven. NBER economists estimated that broker and processing fees add about $23.19 per package. They also found that the average tariff on what the poorest Americans ordered from abroad rose from nearly zero to almost 12%1. CBP describes the change as a border-security gain. It reported more than $1 billion in duties collected on 246 million formerly exempt parcels by mid-December 2025, and an 82% rise in seizures of unsafe goods28.

The EU: a €3 bridge to a new customs code

The EU, the largest market affected, ended its €150 customs-duty exemption on July 1, 202633. The Council chose a deliberately simple interim fix: a flat €3 duty on parcels under €15032. It applies to goods from non-EU sellers registered in the Import One-Stop Shop for VAT, which covers 93% of e-commerce flows into the bloc32.

The charge is levied per tariff line, not per parcel. A parcel holding a silk blouse and two wool blouses pays €6, because the items fall under two customs sub-headings36. That design has a clear consequence. A €40 basket spread across five product categories carries €15 in duty, while a single €140 item pays only €340. The flat rate therefore weighs most heavily on mixed baskets of cheap goods, which is exactly the Temu-style order. Import VAT still applies on top. Carriers note that the €3 cannot be reclaimed if goods are returned35.

The customs-code reform is the bigger story. The €3 levy is explicitly temporary. It is meant to last until the EU Customs Data Hub is running, which is expected around mid-2028. After that, every parcel faces normal tariff rates based on HS code and origin, whatever its value3133. One briefing lists September 21, 2027 as the date for general application of the new Union Customs Code, including importer obligations for distance sales28. More requirements come sooner. From November 1, 2026, low-value declarations must carry up to three product identifiers per line31, and a separate handling fee of about €2 is due40. Accounts differ on whether that fee is charged per consignment31 or per item28, and the operational difference is significant. From October 2026, the Commission must also check every month whether sellers are leaving the IOSS system to avoid the levy36.

National governments forced the pace. Romania imposed a fee of about €5 per shipment in January, and France added a €2 per-item charge in March39. The Commission wanted to prevent a patchwork of national charges38. France's experience was a sharp preview. Customs declarations at Roissy reportedly fell 92% within a month, and cargo flights from China to France dropped 60%. Paris then suspended its tax when the EU duty took effect40.

Early data suggest the EU levy is changing behaviour. Chinese small-parcel e-commerce exports to Europe fell 25% year on year in July, and Belgium alone collected €170 million in the first month40. Card-transaction data from France showed Temu volumes down 50% between June and July, AliExpress down 37% and Shein down 15%40. These figures come from a single month and partly from a fulfilment vendor, so they should be read as early signals rather than final results. Even so, the gap between Temu and Shein is telling. Shein has opened a 740,000 sq m hub in Poland, and Temu aims to ship 80% of its European sales from local warehouses40. The platforms that had already moved stock into Europe were the least exposed.

The UK: late, and under pressure to hurry

Britain is the slowest of the four. The Autumn 2025 Budget committed to scrapping the £135 customs-duty relief by March 2029 at the latest11. On June 23, 2026, the Treasury brought that date forward to October 202820. Import VAT, which overseas sellers or marketplaces already collect at checkout, is unchanged14.

Retailers say the new date is still too late. The British Retail Consortium welcomed the acceleration but said six months does not go far enough15. The industry had already pointed to 1.6 million parcels arriving in the UK every day19. The British Chambers of Commerce raised the opposite concern. It warned that per-item or per-consignment charges would push up prices and hurt small firms. Almost two-thirds of the businesses it surveyed did not know about the change or were unsure whether it affected them17.

The policy reason for the timing is that Britain has to build a duty-collection system from scratch17. The commercial effect is less comfortable. Until late 2028, the UK will be the only one of the four markets still offering duty-free direct parcels. It could absorb Chinese parcel volume diverted from the EU, which is the outlier risk retailers had warned about20.

Japan: the consumption-tax version

Japan's exemption covers both customs duty and its 10% consumption tax on imports of ¥10,000 or less23. Volumes have surged. About 170 million exempt parcels worth ¥425.8 billion arrived in 202430. A Ministry of Finance working group's November 2025 interim report weighed removing or lowering the threshold. It also examined abolishing the rule that values personal imports at 60% of the retail price21.

The timing is reported inconsistently. One account placed the reforms within fiscal year 202622. The most recent briefing says the 2026 tax reform ends the consumption-tax exemption from April 1, 2028, with foreign sellers and large platforms collecting the tax at the point of sale28. The April 2028 date is the more reliable one. Japan is following the EU and Australian model of collection by the platform rather than taxing goods at the border, and since October 2025 import declarations have had to name the platform involved2223.

What it adds up to

The common outcome across the four regimes is that the warehouse is replacing the parcel as the main route for cheap imports. The most likely scenario is that direct China-to-consumer air parcels settle at a permanently lower level, while platforms move fast-selling stock into bonded and domestic warehouses28. Temu's US model already shows this. Its fully managed share fell from about 70% to under 30%, and it set a target for local delivery6.

Consumers will see this less as dramatic surcharges and more as a gradual loss of the ultra-cheap single item. In the US, the losses fall mainly on lower-income shoppers1. In Europe, the cost falls on mixed baskets of low-priced goods40. Regulators get more data on each parcel, and domestic retailers get the more level competition they asked for. Platforms will now compete on logistics depth rather than on a customs gap.