Temu, Shein, and the EU's New Customs War: What It Means for Your Online Shopping

The EU's biggest customs reform since 1968 is aimed squarely at Temu, Shein, and Chinese e-commerce. Here is what changes for shoppers and sellers.

Every day, approximately 12 million small packages from China enter the European Union — a volume that has increased tenfold in the past five years, driven by the explosive growth of platforms including Temu, Shein, AliExpress, and dozens of smaller Chinese-operated marketplaces. A significant proportion of these packages, until now, have been able to avoid customs duties, VAT, and product safety checks by falling below the thresholds at which automated systems flag them for inspection.

The EU's new customs regulation — the most comprehensive reform of European customs rules since 1968, as the Commission's own press materials describe it — is designed to close these gaps systematically. The reform creates a new digital customs clearance system in which every shipment, regardless of value, is registered and assessed. It requires sellers on online marketplaces to obtain VAT registration in the EU before they can legally sell to European consumers. And it creates a 'deemed supplier' liability rule that makes marketplace platforms responsible for collecting the taxes that individual sellers were previously supposed to self-report.

For Temu and Shein, which have built their European businesses partly on price advantages that derive from regulatory arbitrage — paying less tax and meeting lower compliance costs than European competitors — the new rules represent a fundamental change in their operating environment. Internal business analyses leaked to European media suggest that both platforms expect their average selling prices in Europe to rise by 15-25 percent once the new rules are fully implemented.

For European consumers, who have embraced both platforms enthusiastically, this creates a genuine tradeoff: lower prices from regulatory arbitrage vs. higher prices but safer products, paying proper taxes, and competing on more equal terms with European businesses that have always borne full compliance costs.

The Commission is framing the reform as consumer protection and level playing field restoration. It is both of those things. It is also, straightforwardly, European trade protection — using regulatory requirements to impose costs on foreign competitors that European domestic businesses already bear.