The European Union, seeking to manage a flood of duty-free shipments from Chinese retailers like Shein and Temu, is voting to end de minimis exemptions for low-value packages as early as 2026. The EU had initially agreed in 2023 to phase out duty-free exemptions for shipments below 150 euros ($175) by 2028. However, on November 13, EU finance ministers voted to accelerate the timeline by two years in response to repeated calls from European retailers to "avoid delay" in addressing de minimis rule concerns — European Trade Commissioner Maros Sefcovic told Reuters. From a supply chain perspective, the de minimis rule permits duty-free, undeclared imports for low-value shipments globally as a customs simplification measure — set at $800 in the U.S. (Section 321), 150 euros in the EU, £135 in the UK, 20 CAD in Canada, 1,000 AUD in Australia, and 10,000 yen in Japan.
De minimis policies have enabled Shein, Temu, and others to ship products directly from Chinese factories to consumers at prices significantly below market value globally. In 2024, the number of low-value e-commerce packages sent to the EU doubled year-over-year to 4.6 billion, with more than 90 percent originating directly from China. In a written statement, EU member Dirk Gotink said this move was necessary. From a supply chain perspective, Shein Group, originally based in Nanjing, China (now Singapore-headquartered), was founded in 2008 by Chris Xu and has become the global fast fashion leader with a real-time fashion business model. Shein's 2024 annual revenue is estimated at approximately 50 billion dollars. Temu, launched in the U.S. in September 2022 by PDD Holdings (formerly Pinduoduo), is a subsidiary of the Shanghai, China-based parent company. Temu has rapidly gained market share in the U.S. and as of 2024 is operational in 80+ countries.
From a supply chain perspective, the U.S. suspended its de minimis rule under Trump 2.0 in February 2025 for packages from China/Hong Kong — then temporarily reinstated it due to operational challenges — and ultimately ended de minimis globally from all countries effective May 2, 2025. U.S. Customs and Border Protection (CBP) processes 4 million de minimis shipments daily — inspecting this volume is challenging given the risks of fentanyl, counterfeit goods, and forced labor. The European Commission submitted a customs reform proposal in 2023 — with EU Single Window Environment for Customs, EU Customs Authority, and EU Customs Data Hub as key building blocks. UFLPA (Uyghur Forced Labor Prevention Act), EU CSDDD, and the UK Modern Slavery Act are supply chain due diligence frameworks. Cainiao (Alibaba), JD Logistics, YunExpress, 4PX, SF Express, SHEIN logistics, and Temu logistics are among the leading global logistics providers for cross-border e-commerce.
From a supply chain perspective, the end of de minimis will significantly alter cross-border e-commerce business models. Following the U.S. de minimis phase-out, Shein and Temu have raised prices and opened local fulfillment centers in the U.S. — with Indianapolis, Whitestown, Indiana, Marina, California, and Riverside, California serving as major Shein/Temu U.S. distribution hubs. The global fast fashion market is dominated by Inditex (Zara, Pull&Bear, Massimo Dutti, Bershka), H&M Group (H&M, COS, &Other Stories), Fast Retailing (UNIQLO, GU, Theory), Shein, Boohoo Group (Boohoo, PrettyLittleThing, Nasty Gal), ASOS, PVH, and Tapestry. H&M, Inditex, Mango, Primark, and Next are major regional competitors in the EU. Postal customs flows are processed under the UPU (Universal Postal Union) framework — which is also central to terminal dues discussions. Ultimately, the EU's vote to advance the de minimis phase-out date from 2028 to 2026 is accelerating a fundamental transformation of the cost and operational structure of global cross-border e-commerce.
Key Takeaways:
1. The EU voted to advance the de minimis phase-out from 2028 to 2026.
2. Maros Sefcovic, Trade Commissioner, is conveying retailer pressure.
3. In 2024, 4.6 billion low-value packages were shipped — over 90 percent from China.
4. Shein and Temu are the primary target business models.
5. The U.S. ended de minimis globally from all countries effective May 2, 2025.
