EU targets fast fashion e-commerce with new customs regime

The European Union is set to overhaul its customs regulations, targeting the burgeoning low-cost e-commerce sector in a move that could significantly impact global online retail giants and consumer shopping habits.

European Commission President Ursula von der Leyen, who was re-elected for a second five-year term last week, announced the initiative, stating, "We will address challenges with e-commerce platforms to ensure that consumers and businesses benefit from a level playing field based on effective customs, tax, security and sustainability controls."

At the heart of the proposed changes is the elimination of the current 150 euro exemption threshold for import duties, which was set to be abolished by March 1st, 2028. This revision aims to curb the growing influence of Chinese ultra-fast fashion companies such as Shein, Temu, and Aliexpress, while also aligning with the EU's broader Green Deal objectives and push for sustainable production chains.

The scale of the issue is substantial. EU data reveals that in 2023, a staggering 2.3 billion items valued below 150 euros were imported duty-free. The rapid growth of e-commerce is evident, with imports more than doubling year-on-year.

This surge in low-cost imports has raised concerns about fair competition, environmental impact, and the long-term sustainability of European businesses.

A continued crackdown on technology behemoths will also continue. “Tech giants must assume responsibility for their enormous systemic power in our society and economy. We have begun the active enforcement of the Digital Services Act and the Digital Markets Act. We will ramp up and intensify our enforcement in the coming mandate,” von der Leyen said.

On sustainability, von der Leyen pledged a commitment to slash 90 percent of the European Union’s global warming contribution by 2040 as part of a Clean Industrial Deal, a policy to be unveiled in the EC president’s first 100 days in office.