Filenews 23 November 2025
In the EU, this type of trade exceeds €2.5 billion a year with large fiscal losses as taxes and customs duties are not paid
INTERVIEW IN XENIA TURKI
From 2026, small parcels received by European citizens for purchases made through third-country platforms will have to pay more expensively. European Union finance ministers last week agreed that from the new year customs duties will also start to be imposed on parcels worth less than €150. This is a not insignificant number of parcels. In 2024 alone, around 4.5 billion low-value items were imported into the EU, according to a report published last February. The main objective of this measure, said Panos Hatzipanagiotou, Professor of Economics at the Department of International and European Economic Studies of the Athens University of Economics and Business, in his interview with "Fileleftheros", is to deal with the massive influx of small parcels, mainly from China, which are currently not subject to customs duties upon their entry into the EU, a phenomenon that leads to unfair competition for European companies while also raising environmental concerns Concerns. "It is estimated that at the moment micropackages amount to 4.5 billion per year. If we take into account that an average cost for a package is around €20 to €30, then we can calculate that for the EU the amount of this trade exceeds €2.5 billion per year," he stressed.
The new measure is expected to close loopholes systematically exploited to avoid customs duties by e-commerce giants such as Temu and Shein. It will also reduce opportunities for fraud and enhance the integrity and transparency of trade within the internal market. If, however, this is enough to reduce purchases from third countries, this is something that will be seen in the future, although there are several doubts about it, since as Panos Hatzipanagiotou explained, many of these purchases are made by young people, because they are fashionable and not because they are cheaper.
Now, businesses and consumers are starting to weigh the pros and cons of the new developments. However, the transition to a regime of full customs control may cause delays and problems for Customs, which requires adaptation and timely upgrade of customs information systems. "The products will not reach the hands of consumers so quickly and there will certainly be management costs for the authorities. And here it should be noted that the customs authorities must be organized and this will of course not be done without cost, so that they can face the new challenge", stressed Panos Hatzipanagiotou.
-What exactly is the European Union's decision that from the beginning of 2026 the customs exemption for small parcels under €150 ceases?
– Until now, imports of products into the EU from third countries with a value of less than €150 were exempt from customs duties, even though they were subject to the customs procedure. The reason for the exemption was primarily due to the fact that the customs management costs of these micro-shipments exceeded the expected customs revenues. Of course, since these products were imported into the markets of EU countries, they were liable to the VAT of the specific markets. The EU has decided that the exemption for packages worth less than €150 will be abolished and that the date of application of the new scheme will take effect in 2026. IN this case, these micro-shipments of products from third countries will be both subject to customs and customs duty, but also to the current VAT tax regime of the purchases of EU countries to which they are directed.
The main reason for this change, mainly is the fact that there is a huge wave of low-cost imports from third countries, especially from China in order to avoid the tariff burden. This practice by third countries is perceived as a practice of "unfair competition" towards EU companies, which produce similar products at higher costs that "exploited" the €150 threshold to avoid tariffs. With the new regime, businesses and individuals importing goods, especially e-commerce businesses, have to comply with the new rules on importing products from third countries into EU markets and bear the costs of customs duties and customs procedures from which they have been largely exempt so far.
-What were the reasons behind this decision?
– Nowadays, international trade has moved into the realm of e-commerce. It became clear that different provisions had to be created for its management. For a variety of reasons, we have a huge boom in e-commerce. One reason is that there is the immediacy of contact and therefore this immediacy is very low-cost. A business doesn't need to run a special campaign to promote its products or services. A second is the fact that e-commerce has helped to reduce the cost of producing many products. Platforms like Shein or Temu use algorithms that adapt to consumer preferences. If I do a search for a product in the next few days I will be bombarded with relevant custom made ads that concern me to a very large extent. This enables producers, businesses in trade at a fairly manageable cost, to adapt their production and products to consumer requirements. And let's not forget the opportunity given to small and medium-sized enterprises around the world to develop an export activity.
-Do we have data on how many micropackages are imported and what is the cost in the EU?
-It is estimated that at the moment micropackages from third countries to the EU amount to 4.5 billion per year. If we take into account that an average cost for a package is around €20 to €30, then we can estimate that for the EU the amount of this trade exceeds €2.5 billion per year. We can therefore also consider how great the fiscal losses are. There are no official figures for the exact amount. We know that most of these packages come from China, so in essence China has been entering European markets until now, somehow bypassing duties and taxes imposed by the EU. Therefore, there is also the issue of unfair competition, taking into account that European companies that produce similar products are burdened with the relevant charges.
-Will there be a single fee for all small parcels imported under €150 or will they be proportional to their value?
-My reading is that there will be a charge of €2 for each micropackage. An amount that is imposed on the basis that regardless of the fact that they are small parcels, due to the volume that exists, they create a very large bureaucratic burden, since in any case they have to go through borders, through customs, to be registered... This fee will be paid at the time the consumer receives his package and this will be done after this product is cleared through customs. So it is a cost not of the country that sends it or the producer but of the one who receives it and the country where the micro-package arrives.
-How do you think e-commerce will be affected? Will the fact that micropackages become more expensive stop European consumers from buying from these platforms?
– There is a question of cost-benefit. Yes, the price of these products will be increased, even by €2 maybe even more due to VAT. This puts pressure on both sides, producers and consumers. Part of this burden may be borne by producers, who will reduce the prices of their products, in order to maintain the share of the markets they have. A second part, the largest one, will be borne by consumers in the country of arrival. It remains to be seen whether this burden, together with VAT and duty, will be such that it will make these products even more expensive than those produced in domestic markets. And to answer your question, I think there will be repercussions, clearly a small reduction in e-commerce. However, let's not forget that the cost of the products on these platforms is reduced, because they manage huge quantities of the same product and this somehow comes to offset both the tax and customs burden.
-How do you comment on the position that these fees will hit the weaker economic strata by making products such as clothes or shoes more expensive?
– It is clear that specific groups of consumers who turn to these products will be affected. It is noteworthy, however, that a very large group that turns to these platforms for purchases are young people, not necessarily from the lower economic classes. They shop there because it's trendy, not because it's cheaper. Temu and Shein are bought by young people whose family income can be up to €100,000 a year. From shoes to accessories, these platforms are aimed at young people. And I don't even know whether low incomes turn to these platforms for shopping.
-How likely do you think the tariffs will deter the purchases of products, which let's say are not necessary?
-Today this is the market, that is, it is advertising and marketing that create consumer preferences and consumption patterns. I go in to do a simple search for a trip to Cyprus, for example and in the following days I am bombarded with the relevant advertisements. E-commerce has "read" me, knows what I want, knows what I could buy and bombards me with the relevant material. And in the midst of all this bombardment, we will see something that we will want and where we will buy. And this moves the market, from which domestic businesses and producers naturally benefit.
-There is also the position that if products from third countries become more expensive, it will be an opportunity to stimulate domestic European production. Is this true?
– I think it is something difficult to happen. These products come from countries where the cost of production is one-third, one-fourth compared to Europe. Let's just compare the wages of a worker in Vietnam or Cambodia with those in France or Germany. That is why here and in many countries European countries have lost their comparative advantage in the production of these products. So a turn to other products, a turn that other directions, possibly the organization of European trade on a similar basis, may be the answer to making European companies and European producers more competitive. In my view, it is right to impose tariffs from third countries. Beyond that, however, using these measures as a wall or as an obstacle to international trade and the movement of goods and services is something terrible.
The challenge for customs authorities in the EU and nation states is great
-What will be the challenges that European customs will have to face in the new year, as they will have to process millions of micropackages every day?
-The issue is highly managerial. Clearly, the volume of transactions will increase, since until now these packages did not go through so many thorough checks. There will be a delay, they will not reach the hands of the consumers who have bought them so quickly and there will certainly be administrative costs for the authorities. And here it should be noted that the customs authorities must be organized and this will of course not be done without cost, so that they can face the new challenge. On the one hand, this is a central issue for the EU, but to a large extent it concerns the member states themselves, how ready they are to be able to do this management.
-And let's not forget that we are also waiting for a customs reform promoted by the EU for the next period.
-If I'm not mistaken, the reform has been accelerated and that the goal is to implement it in the second half of 2026. Revenues are currently burning Europe and that is why it is doing everything it can to increase it.
-Can we estimate approximately how much the revenues for the EU will be from the tariffs on packages from third countries?
-It is difficult to make such an estimate, because exactly we do not know exactly what the volume of these packages is. We will have a much better picture in two to three years, when a reasonable period of time will pass from the implementation of the measure, so that a good assessment can be made, both at national and European level. Trade is changing at a rapid pace and the most important thing is that the rules of the game are also changing. It is a new becoming, which we knew until now to some extent, but now we see that it is increasing, because there are new perspectives. At the moment there is a vigilance and the course will show to what extent the network that will manage electronic transactions must be developed.
One can reasonably wonder whether the EU will ultimately count profits or losses. And I say this in the sense of what the revenue from the tariffs on micropackages will be in relation to the costs that will be paid for their management by the customs authorities.
-If I may be allowed to express myself, this is also where corporatist issues are raised. In the sense that European companies are subject to competition from third countries and that something needs to be done. The cost of these products outside the EU is lower even with the imposition of tariffs and the quality factor has largely been eliminated, since most of the quality products are no longer inferior to those in Europe or North America. Therefore, it is a question of net cost, whether it is attractive because of its price. Now, it is the pressures that businesses, the various sectors put on businesses, for protection.
