The cross-border e-commerce industry has not yet recovered from the impact of the cancellation of the US T86 policy, and it has ushered in a new test!

Recently, according to foreign media reports, the European Union is preparing to cancel the tax-free policy for goods below 150 euros (about 125 pounds) and is considering charging retailers a handling fee.

If this policy is implemented, it will be like "adding insult to injury" for sellers who mainly operate in the European market!

Once this change is implemented, it will significantly increase the compliance and logistics costs of cross-border e-commerce and squeeze sellers' profit margins.

If sellers choose to make up for this cost by raising prices, it will directly weaken the competitiveness of Chinese products in the European market.

Although the EU has not yet officially introduced this new regulation, the trend has become increasingly obvious, especially after the United States canceled the T86 policy, the EU has discussed this policy more frequently.

EU plans to cancel 150 euro tax-free policy

The European Commission recently announced an important policy adjustment: they plan to cancel the tax-free policy for goods below 150 euros and strengthen supervision of goods imported from China.

Why was this decision made?

The answer is simple - the influx of low-priced goods has put enormous pressure on EU customs, especially goods from Chinese e-commerce platforms.

The EU believes that many of these goods are underpriced when entering the EU, thereby evading tariffs.

This not only puts local retailers in an unfair competitive position, but also leads to the influx of a large number of substandard goods and even has an impact on the environment and climate.

Data shows that in 2023, 2.3 billion duty-free goods entered the EU, of which about 91% came from China, and this figure is expected to soar to 4.6 billion in 2024.

If this policy is formally implemented, the consequences will be disastrous.

First, sellers need to pay additional tariffs and value-added tax for these goods, resulting in higher logistics costs.

At the same time, complicated customs clearance processes will extend the delivery time of goods, thereby affecting customer experience and order volume, and may even lead to an increase in return rates.

For those sellers who have grown rapidly in the European market through the "distribution model", this is undoubtedly a heavy blow.

On the one hand, sellers need to bear higher operating costs. On the other hand, extended logistics cycles and increased tariffs will significantly reduce their price competitiveness.

Many cross-border e-commerce platforms, especially those with mid- and low-priced products, will face greater market pressure.

How will cross-border e-commerce respond in the future?

Optimize the supply chain: Find alternative low-cost logistics solutions and avoid over-reliance on duty-free channels.

Adjust pricing strategy: In response to the upcoming increase in taxes and logistics costs, adjust pricing appropriately to maintain market competitiveness.

Consider using overseas warehouses: Simplify customs clearance procedures and improve delivery efficiency by establishing warehouses locally or strengthening cooperation with local logistics.

Strengthen compliance: Strengthen compliance checks on products to ensure they meet EU safety and quality standards and avoid returns or fines due to substandard products.

Final Words

As global cross-border e-commerce competition becomes increasingly fierce, every policy change may trigger huge market fluctuations.

Sellers need to stay vigilant at all times, keep up with industry trends, and make corresponding adjustments.

Only through refined operations, cost control and compliance strategies can we maintain competitiveness in an ever-changing market environment and not be dragged down by policies and market fluctuations.

Therefore, friends in cross-border e-commerce, please make preparations quickly, seize new opportunities, and don’t be shocked by this wave of policy shocks. Continue to move forward steadily!

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