EU is considering lifting the tariff exemption regulation on low-priced Chinese products to address the influx of low-priced Chinese products. The European Commission is reportedly planning to abolish the duty-free regulation for imports of goods amounting to less than 150 euros (approximately 220,000 won) by the end of this month and impose tariffs on them like regular goods, according to the Financial Times. EU authorities have stated that this revision of the tariff exemption regulation is aimed at platforms such as AliExpress, Tmall, and Shein, which are major sellers of low-priced products in China.
In 2020, the number of duty-free items imported into the EU region more than doubled compared to the previous year, reaching 2.3 billion. In just one month in April this year, over 350,000 duty-free items were imported, nearly averaging close to two items per household in the EU.
The European Commission is planning to implement various measures to respond to the oversupply of low-priced Chinese products until the next European Commission is formed at the end of this year. Discussions on the revision of the tariff exemption limit have been delayed due to concerns from some EU member states about the increased workload on already saturated customs services. The European Commission’s proposed revision would need to go through legislative procedures involving three parties (the European Commission, the Council composed of representatives from 27 member states, and the European Parliament) for implementation. Discussions on the formation of the new European Commission and Parliament are still ongoing following the European Parliament elections last month.
Eric Mamer, the Chief Spokesperson for the European Commission, noted that the revision aims to address the abuse of duty-free regulations, with 65% of packages under 150 euros actually being traded at prices lower than their actual value. The improvement plan proposed by the European Commission will be presented to the European Parliament for deliberation and final approval by the end of this month.
The flood of low-priced Chinese products was made possible not only due to the business model of e-commerce platforms like AliExpress but also because of structural cost advantages under the Universal Postal Union (UPU) agreement, which classifies China as a developing country. While Amazon sells products through sales companies based in Europe, Chinese e-commerce platforms can take advantage of duty-free regulations by delivering goods via international direct purchase methods through air transport to European consumers. Furthermore, the classification of China as a developing country under the UPU agreement allows Alit…