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Other CategoriesIn July this year, the EU just abolished the tariff exemption for cross-border e-commerce goods priced below 150 euros and began to impose a temporary fixed tariff of 3 euros. By November, there would be an additional charge: starting from November 1st, the EU will charge a 2-euro processing fee for cross-border imports.
The official term is "processing fee", but for merchants, it doesn't make much difference - it's just an additional cost for each shipment. And this 2-euro fee is added on top of the 3-euro tariff that was implemented in July. If a package involves one tariff category, the total cost when entering the EU is 3 euros plus 2 euros for processing; if a package contains goods from multiple tariff categories, the cost will continue to increase.
This figure becomes obvious when placed in the context of the actual product prices: for low-value imported goods entering the EU in 2025, the average declared value is only 8.82 euros; such goods account for nearly 98% of the total number of imported goods in the EU, and 93% of the volume comes from China. Based on an average product price of 8.82 euros, the 5-euro fee is already 57% of the product value.
When the 3-euro tariff of 7th July was implemented, we wrote an article on the Mottens Substack English blog. At that time, our judgment was that this policy might not bring down large platforms like Temu and SHEIN, but might instead accelerate the market towards a concentration of the leading players. Large platforms have scale and can adjust prices, supply chains, and delivery methods; small sellers who rely on "receiving orders from Chinese warehouses and delivering one item at a time to Europe" are the ones who suffer the most.
After the 2-euro processing fee was introduced in November, the policy direction of the EU becomes clearer. It intends to gradually eliminate the past treatment differences between single-piece e-commerce direct mail and traditional batch imports. The current 3 euros is only a temporary arrangement and will exit in 2028. At that time, cross-border packages will pay tariffs at the normal commodity tax rate; at the same time, the responsibilities of platforms and sellers as importers, the data held by customs, and the requirements for product identification will all increase.
For Chinese cross-border e-commerce, the new policy direction also hits a frequently overlooked advantage: inventory can be managed very late.
In the past, a single product could remain in the Chinese warehouse indefinitely. Platforms did not need to predict in advance what German consumers would like, how much goods should be stocked in France, or whether a certain SKU could sell in Italy; they would wait for European consumers to actually place orders before sending the goods from China. This allowed for maintaining a very large product variety without having to bear a large amount of inventory risk in each overseas market in advance.
So the typical chain of operations in the past was:
Chinese factory/warehouse → European consumers place orders → single-piece cross-border → European customs clearance → consumers
For a very long-tail product, even if Europe only sells a few units per month, it doesn't matter because the inventory is in China. Therefore, Temu was able to make the product pool very large.
Now, the single-piece direct mail is more expensive, customs requires more product data, and the responsibilities of the importers and the customs' data and product identification requirements are also increasing; relatively speaking, it is easier to operate a supply chain that enters Europe in batches first:
Chinese factory → enter Europe in batches → European warehouse → consumers place orders → local delivery
It seems like just moving the warehouse from China to Europe, but the business logic has actually changed. The new model requires platforms to decide what to stock in advance and then wait for consumers to purchase - the inventory decision is moved forward.
Take SHEIN as an example. Its past very important ability was to try to delay the inventory decision as long as possible: use a very small batch to test the market, and then quickly place orders after seeing the real demand. The significance of "small orders with quick delivery" goes beyond just speed of production; it is more about reducing the risk of leaving a large amount of inventory if the consumer's demands are misjudged.
This is why for SHEIN, moving the decision on European inventory forward actually changes the very core supply chain logic that was previously in place.
The 2026 first-half financial report released by SHEIN this week also somewhat reflects this pressure. The revenue growth in the first half was only 1%, and the adjusted operating profit decreased by approximately half compared to the previous year; the European business also faced significant pressure. Of course, these changes should not be simply attributed to the new EU tariffs in July - after all, the latest rules have not truly taken effect in the first half - but SHEIN has already been increasing local inventory in Europe, adjusting prices and supply chain structures to prepare for the upcoming changes.
Temu has also been doing similar things. When we discussed with Temu and SHEIN in 2024, local inventory and local fulfillment in Europe were already very clear directions for both companies; later, the US cancelled the de minimis rule, further accelerating this process. JD entered Europe this year in a more direct manner, starting with local warehouses and local delivery systems.
From the cancellation of tariff exemptions in July to the new handling fees in November, Europe made it uneconomical for several hundred million 8-euro packages to cross customs one by one. Thus, the supply chains of platforms and sellers will naturally shift towards the European interior. The most typical model of Chinese cross-border e-commerce in the past was to keep the goods in China and wait for overseas consumers to place orders. Next, more and more goods would already be waiting in Europe before consumers placed orders.
And when these inventories truly enter Europe on a large scale, who will manage the warehouses, who will handle the deliveries, and who will handle the last-mile delivery will bring about the next round of changes.
