One thing is becoming clear, Europe wants to buy European. The problem is that EU governments cannot agree on where Europe ends.

France, Germany and Spain are heading into a fresh clash over what should qualify as “Made in Europe” under the European Commission’s proposed Industrial Accelerator Act, a centerpiece of Brussels’ effort to rebuild industrial capacity and reduce dependence on foreign suppliers, particularly China and the United States.

The Commission’s proposal, unveiled in March, would introduce targeted “Made in EU” and low-carbon requirements for public procurement and public support in strategic sectors including steel, cement, aluminium, cars and net-zero technologies.

The aim is straightforward: use the enormous purchasing power of governments to create demand for products manufactured in Europe, however, the politics of defining “European” are proving considerably less straightforward.

What does “Made in Europe” actually mean?

At its simplest, the concept means giving European-made products an advantage when governments or other public authorities award contracts or provide support.

Imagine a European government is buying a fleet of electric buses. Under a strong “Made in Europe” rule, a bus manufactured inside the EU, using a significant share of European components, could qualify for preferential treatment over a competing vehicle assembled elsewhere.

The same principle could apply to electric vehicles, steel, solar and wind equipment or other strategic technologies.

The details matter, however. Modern industrial supply chains rarely stop at national or even European borders. A European car might be assembled in Germany, contain batteries from another country and rely on critical minerals or electronic components sourced elsewhere.

That is why the argument in Brussels is increasingly less about whether Europe should have an industrial preference — and more about how far that preference should extend.

France: Europe means the EU

Paris is pushing the strictest interpretation. Under the French approach, the core of the policy should be the European Union itself: public money should primarily support production and supply chains located within the bloc.

The logic is that the Industrial Accelerator Act should strengthen Europe’s own manufacturing base rather than create a new route for foreign companies to benefit from EU industrial spending.

French industry has also been pressing for a more ambitious interpretation of the legislation, arguing that Europe needs stronger safeguards if it is to preserve industrial capacity and employment.

For Germany the motto is “Made with Europe”

Germany’s position paper argues that trusted trading partners should be eligible where they offer European companies equivalent access to their own public procurement markets.

That could include countries covered by free-trade agreements or customs unions with the EU, as well as signatories to the World Trade Organization’s Agreement on Government Procurement.The approach reflects the reality of German industry, which is deeply integrated into international supply chains and export markets.

Berlin is particularly interested in keeping countries such as Norway, Switzerland and, most recently, Canada inside Europe’s industrial ecosystem. The argument is also strategic: Europe may need partners if it wants to build resilient supply chains without trying to manufacture every component inside the EU.

Spain looks to compromise

Madrid is proposing a middle ground, leading to the creation of three categories of countries, lead by the EU’s 27 member states. Then the second tier would cover European Economic Area countries such as Norway, alongside trusted partners that offer reciprocal access to public procurement. Finally, a third category would include countries with free-trade agreements or customs unions with the EU.

Spain also wants the framework to allow access to critical components from third countries where Europe currently lacks sufficient manufacturing capacity or alternative sources of supply, giving Brussels greater flexibility while preserving a clear hierarchy around European production.

The bigger battle

The dispute is about more than procurement rules.

The Industrial Accelerator Act is part of a broader EU push to increase manufacturing capacity, accelerate clean technology and reduce strategic dependencies. The Commission has set an ambition of raising manufacturing’s share of EU GDP to 20 percent by 2035, from around 14.3 percent today.

That makes the definition of “Made in Europe” potentially consequential for companies across the bloc and for trading partners outside it. Britain, for example, is watching closely. Because UK manufacturers remain deeply integrated with European supply chains, exclusion from the EU preference could have consequences for sectors such as automobiles.

Italy, meanwhile, has signaled support for including strategic partners without settling on a detailed model.

That leaves Ireland, which holds the rotating Council presidency, with the unenviable task of finding common ground among 27 governments.

(Sources: European Commission)

Read more:

The duty has applied across the EU since July 1, 2026. It has already brought in more than 2 million euros in Cyprus from imports from China.

The platforms have made two main changes. Both aim to manage how customers see the duty and to cut its financial impact as far as possible.

The first change is to their systems and prices. The duty is now paid at checkout, so shoppers pay nothing extra when the item arrives.

The second is a longer-term model with a bigger presence inside Europe. That means local sellers and more stock held in the EU, which avoids the 3-euro charge per item that applies when a European shopper receives a product directly from China.

Temu has made one such move in Cyprus. In September, it announced a partnership with the Cyprus IT Enterprises Association (CITEA). The partnership aims to link the platform more closely with Cypriot businesses and to use Temu as a channel into European markets. It builds on the Local Seller Program, which Temu brought to Cyprus in 2025. The programme lets local businesses sell through the platform to customers across Europe.

How the model works

Storing goods in Europe does not make taxes and other charges disappear. What changes is how products enter the EU.

A product worth a few euros sent on its own from China to a shopper in Cyprus carries the flat 3-euro charge. Under the new model, the platforms ship larger quantities, thousands of units per container, to warehouses in Europe.

There the goods are imported and cleared through customs, and orders are then fulfilled from within the EU. Once VAT has been paid, a product can move freely within the EU. Sending it on to Cyprus is therefore not a new import from a third country, and the 3-euro duty does not apply.

The company still pays VAT, customs duties, transport, storage and distribution. However, the cost per item is lower, especially for very cheap products, where a 3-euro charge can equal or even exceed the purchase price.

The savings go beyond the duty. Shipping a container of thousands of products costs less per item than sending thousands of separate parcels from Asia to Europe. It also shortens delivery times and makes returns easier.

The model has costs of its own: it requires warehouses, larger stocks and accurate demand forecasting. But the more direct small parcels from outside the EU cost, the stronger the incentive for the platforms to go local and move more of their business into Europe to keep supplying European customers.

In effect, shoppers who want to avoid the 3-euro charge will buy products “made in China”, but with a European address.

The European Parliament’s Foreign Affairs Committee (AFET) has called for a stronger and more principled EU-China policy, combining engagement with greater protection of European interests. In a recommendation adopted by 44 votes to 9, with 12 abstentions, MEPs stressed that Europe should continue working with China on global challenges such as climate change, peace and security and human rights.

However, they emphasised that this should be done with caution, as at the centre of todays debate is a growing concern in European capitals: how to cooperate with China without becoming dependent on it.

From economic dependence to resilience

The Parliament is calling for urgent action to address Europe’s exposure to China in strategically important sectors, including critical raw materials, medicines, batteries, electric vehicles, semiconductors and information and communication technologies.

MEPs are advocating a rigorous “de-risking” strategy aimed at diversifying supply chains, protecting critical infrastructure and technologies and strengthening Europe’s own industrial capacity. This shift reflects a lesson learned from recent crises, most notably with the United States and the Trump administration.

Economic dependence can quickly become a strategic vulnerability and concentrated supply chains may leave Europe exposed to disruption, political pressure or economic coercion, according to the committee’s press release.

China’s industrial overcapacity, state subsidies and restrictions on European companies seeking access to its domestic market have further intensified concerns about the fairness of the relationship.

MEPs are therefore demanding greater reciprocity and a level playing field in trade and investment. Where China fails to open its markets, they argue, the EU should be prepared to take proportionate measures.

Building alternatives, not walls

Nevertheless, reducing dependence on China does not mean turning Europe into a fortress. The Parliament sees stronger international partnerships as part of the answer. China’s Belt and Road Initiative, its global programme of infrastructure and investment projects, has expanded Beijing’s economic reach across Asia, Africa, Latin America and beyond. The EU’s Global Gateway, launched to support investment in infrastructure, energy, transport and digital connectivity, is intended to offer a European alternative based on transparency, sustainability and good governance.

Stronger Global Gateway partnerships, particularly in Africa and Latin America, could give Europe greater room to pursue its own strategic interests while creating new opportunities for European investment and trade, pointing to a broader idea of European strategic autonomy. By offering infrastructure and investment based on transparency, sustainability and good governance, Europe can compete internationally without abandoning the principles it seeks to promote.

Values are part of the strategy

Economic security is only one side of the equation. The Parliament is also pressing for a stronger European response to human rights concerns in China, including repression, forced labour and policies affecting Tibet and Xinjiang. It is calling for the unconditional release of political prisoners and for a reinforced human rights dialogue.

For the EU, this is more than a foreign-policy talking point as it claims that democracy, human rights, the rule of law and respect for international law are central to its identity and international influence. The challenge is to ensure that economic interests do not gradually erode those principles.

A more resilient European Union therefore also means one that is capable of protecting its democratic institutions from cyberattacks, espionage, foreign interference and other hybrid threats. Strategic autonomy cannot be achieved solely through industrial investment; it also requires stronger democratic resilience at home and abroad.

A relationship on European terms

Rapporteur Hilde Vautmans of Renew Europe, today summed up the emerging approach by arguing that China remains an essential partner for Europe, but that the relationship must be based on clear rules, economic fairness, security and respect for human rights and international law.

“China is an essential partner for Europe, but we must also be clear-eyed about the systemic rivalry in our relationship. A sustainable partnership requires clear rules: no spying, no dumping, a level economic playing field and respect for human rights and international law. With the Xi-Trump meeting, the European Council and the EU-China Strategic Dialogue ahead, this recommendation could not be timelier. Europe must finally act as one,” she stated.

The message from Parliament is ultimately about recalibrating the relationship rather than abandoning it.

The Parliament will vote on the report at one of its upcoming plenary sessions.

Read more:

Israeli Foreign Minister Gideon Saar said Britain would also be excluded from a US-led coordination mission for Gaza, and that several British officials, including former Labour leader Jeremy Corbyn, along with other UK nationals, would be barred from entering Israel. Saar said the British move amounted to unwarranted interference in a sovereign state’s affairs and its electoral process, and rejected Foreign Secretary Ed Miliband’s comments accusing Israel of ethnic cleansing of Palestinians as false. He said he had coordinated Israel’s response with Prime Minister Benjamin Netanyahu, accusing Britain of interfering in Israel’s elections, due in late October. The consulate being closed is accredited to the Palestinian Authority in the West Bank.

Trade measures and international backing

The trade restrictions announced by Britain, France and Canada on Tuesday extend a series of measures targeting Israel’s settlement policy and reflect its deepening diplomatic isolation among longstanding allies. UK Prime Minister Andy Burnham, French President Emmanuel Macron and Canadian Prime Minister Mark Carney said in a joint statement that the move marked “a further turning point in our approach to protecting the two-state solution,” and that they intended to raise the issue at the UN General Assembly later in September.

Separately, the foreign ministers of nine other countries, among them Denmark, Norway, Poland, Spain and Sweden, issued a statement reaffirming their support for a negotiated two-state settlement between Israel and a future Palestinian state.

Miliband said Britain could no longer merely voice concern over the situation and needed to act against settlement expansion, adding that the UK believes ethnic cleansing of Palestinians is taking place in parts of the West Bank. He said new legislation would take six to nine months to come into force, but that sanctions against a number of extremist settlers would take effect immediately. Citing the threat Israel faces from Iran, Miliband said Britain would also sanction the Hezbollah-linked financial institution Al-Qard Al-Hassan and reimpose economic sanctions on Iran in line with the EU and the United States.

Canada’s Foreign Minister Anita Anand wrote on social media platform X that Canada has long viewed the two-state solution as the best route to lasting peace in the Middle East and to addressing Israel’s security concerns, and that illegal settlements in the West Bank undermine those goals.

The United Nations, Palestinians and most countries consider the settlements illegal under international law, a position Israel disputes. A separate Reuters investigation published on Tuesday found that the Israeli government is funding some of the West Bank’s most radical settlers, who use illegal outpost farms to push Palestinians off their land.

Mixed reactions

France pointed to the rapid growth of settlements and a rise in violence as grounds for its decision. However, US Secretary of State Marco Rubio warned the sanctions could destabilise the West Bank and said Washington would not join the import ban.

Britain’s chief rabbi, Sir Ephraim Mirvis, criticised the sanctions plan as an example of “gesture politics” and said it represented a bleak moment for British Jews, arguing the measures would end up strengthening the extremism they are meant to counter.

Settlement produce, mainly agricultural goods such as dates, citrus fruit, herbs and wine, accounts for only a small share of Israel’s total exports, meaning the trade bans are largely symbolic rather than economically significant. Israel announced plans for 1,000 new homes in the West Bank on the same day the measures were unveiled. Recent international concern has centred on Israel’s E1 settlement project near Jerusalem, which would cut through land Palestinians see as essential to a future independent state.

Strained ties

Relations between Israel and Britain have deteriorated in recent years amid UK criticism of Israel’s conduct in Gaza, the expansion of West Bank settlements and rising settler violence against Palestinians. Britain recognised a Palestinian state in 2025 as part of efforts to advance the two-state solution and had already imposed sanctions over West Bank settlements in June.

France’s move comes amid growing frustration among some EU member states, who have pushed for a bloc-wide response but have been unable to secure the qualified majority needed for EU-level action, largely due to opposition from Germany.

(Reuters)

According to data published on Monday by the Statistical Service, the deficit reached 4,679.1 million euros in the January–June 2026 period, up from 4,055.1 million euros in the first half of the previous year.

The foreign trade data includes final figures for May and preliminary figures for June.

Imports up 11.9% in June

Total goods imports totalled 1,289.3 million euros in June, up from 1,152.2 million euros in the same month of 2025, an increase of 11.9%.

Imports from other European Union member states amounted to 730.7 million euros, while those from third countries stood at 558.6 million euros. In June 2025, the corresponding figures were 615.1 million euros and 537.1 million euros.

June’s imports include the transfer of economic ownership of ships worth a total of 117.8 million euros, compared with 55.8 million euros in the same month of 2025.

At the same time, total goods exports fell to 463 million euros, a decline of 9.9%, from 514.1 million euros in June of the previous year.

Exports to other EU member states came in at 212 million euros and to third countries 251 million euros, compared with 149 million euros and 365.1 million euros respectively in June 2025.

Exports include the transfer of economic ownership of ships and aircraft worth a total of 77.3 million euros, compared with 68.5 million euros in June 2025.

The first-half picture

Total goods imports for the January–June 2026 period reached 7,296.8 million euros, up 8.8%, compared with 6,705.4 million euros in the same period of 2025.

By contrast, total goods exports fell 1.2%, to 2,617.7 million euros, from 2,650.3 million euros in the first half of 2025.

The rise in imports and the simultaneous fall in exports led to the widening of the trade deficit to 4,679.1 million euros.

Imports up 22.4% in May

Based on final data for May, total goods imports reached 1,309.4 million euros, up 22.4%, from 1,070.1 million euros in May 2025.

Exports of domestically produced goods, including ship and aircraft stores, rose 63.9%, reaching 348.1 million euros, from 212.4 million euros. Industrial product exports specifically, excluding ship and aircraft stores, amounted to 334.7 million euros, compared with 197.9 million euros in May 2025. Agricultural exports, also excluding ship and aircraft stores, fell to 12.2 million euros, from 13.3 million euros.

Exports of foreign products, including ship and aircraft stores, rose 50.5%, reaching 173.5 million euros, compared with 115.3 million euros in May 2025.

Fuel, halloumi and pharmaceuticals lead exports

The main categories of domestically produced exports for the January–May 2026 period were mineral fuels and oils, halloumi, and pharmaceutical products.

The value of mineral fuel and oil exports reached 743.6 million euros, halloumi exports stood at 167.5 million euros, and pharmaceutical exports came in at 144.2 million euros. These amounts do not include ship and aircraft stores.

The €3 per item tariff took effect on July 1 on imports into the EU of small parcels worth up to €150 from third countries.

According to Customs Department spokesman Giorgos Konstantinou, July’s revenue came to almost €2 million, covering 650,000 items contained in 160,000 parcels.

Konstantinou said small parcel imports showed a relative decline compared with previous months, though he said this could be due to several factors. He suggested consumers may have placed more orders before the tariff took effect in an attempt to avoid paying it, while July is also a holiday month when orders tend to fall regardless.

He said it would become clearer over the coming months whether the tariff has affected consumer behaviour, adding that companies’ responses, including where they base warehouses and where they ship products directly, are also expected to play a role. He said the picture should become clearer after three to four months.

Asked whether the department faced problems managing the new administrative workload, Konstantinou said there had been no major issues. He said the first few days required some adjustment while calculations and the collection process through the accounting system were being finalised, but said things have since settled down.

Asked whether there had been complaints from the public, Konstantinou said there had been none, though he noted that in the first few days there had been questions about whether orders would be charged depending on when they were placed. He said that once the tariff was applied, people came to understand it did not significantly affect overall prices, and he expected orders to return to their previous levels.

Despite a significant improvement in the balance sheets of businesses and households, and an increase in bank lending, the Central Bank warned that the uncertain international environment continues to create risks to financial stability.

According to the Central Bank’s Financial Stability Report, businesses in these sectors are more exposed to a potential slowdown in external demand, to rising operating costs driven by energy prices, and to the potential impact of a further escalation in Middle East conflicts.

These businesses also carry higher levels of debt and relatively limited cash reserves, the report added, which increases their vulnerability if economic conditions worsen.

By contrast, the report found greater resilience among businesses in information and communication, professional, scientific and technical activities, and transport and storage. These sectors have lower leverage and stronger cash reserves, according to the report, allowing them to cope more effectively with potential external shocks.

Despite the risks, the report said financing conditions remained strongly positive. Improved balance sheets for businesses and households, combined with a more favourable interest rate environment, led to a significant rise in new bank lending in 2025:

• New lending to businesses reached a record high of €3 billion
• New lending to households stood at €1.8 billion

The Central Bank said that despite this expansion in credit, banks continued to apply strict lending criteria, carefully assessing borrowers’ creditworthiness and limiting the risk of new non-performing loans.

Concern for households

The report found that a resilient labour market continued to boost household incomes in 2025, with average earnings rising faster than inflation. However, the improvement was not uniform. Lower-income households recorded pay growth of just 3.9%, compared with 7.1% for higher-income groups. This gap, the report said, limits lower-income households’ ability to strengthen their financial resilience.

At the same time, household expectations for their future financial situation worsened following the escalation of conflicts in the Middle East. The Central Bank estimated that a possible resurgence of inflation and rising borrowing costs could put additional pressure on households, particularly those with high debt or limited liquidity.

A positive development was the further increase in deposits, which serve as an important liquidity buffer in 2025:

• Business deposits rose by 17.5%, the highest annual rate since 2018
• Household deposits increased by 6.2%

This growth, the report said, strengthened the private sector’s resilience to potential future turbulence.

External risks

The report stressed that while the direct effects of US trade policy on Cyprus are expected to be limited, the indirect effects could be significant.

The main risks that could affect the Cyprus economy and, in turn, financial stability, include:

• A possible rise in energy prices
• New disruptions to supply chains
• A slowdown in economic activity among key trading partners
• A deterioration in the investment climate

In a closed-doors discussion on July 13, EU foreign ministers overwhelmingly backed sanctioning trade with Israeli settlements in the West Bank.

The discussion followed the European Commission’s presentation of several options to restrict trade with settlements, including the most far-reaching measure: a complete ban on such imports.

EU foreign policy chief Kaja Kallas said that a full ban on imports of goods produced in Israeli settlements received the “most support” from EU foreign ministers during the meeting in Brussels. However, complete unanimity is required for this to pass.

Speaking in Cork, Ireland, European Commission President Ursula von der Leyen suggested that EU capitals were the only hold up against further actions, as she noted that the Commission proposed suspending trade preferences under the EU-Israel Association Agreement ten months ago but failed to get the approval of national governments in the Council.

“So, you see there a lot of activity going on, but in the Council right now there is no move forward with a solution or an agreement on how to proceed,” von der Leyen said.

Compared with 2023–2024, there has been a noticeable shift inside the EU institutions toward a more critical stance on Israel, particularly regarding the implementation of the EU–Israel Association Agreement.

Views from Brussels

Last October, MEPs from the Progressive Alliance of Socialists and Democrats Party (S&D), the second largest political group of the European Parliament, emphasised the importance of establishing a Palestinian State to ensure long-lasting peace and security.

S&D leader Iratxe García insisted that any peace plan should include an end to the ongoing massacre in Gaza, allow the delivery of humanitarian aid, and be based on the two-state solution with the recognition of both Israel and Palestine.

Speaking at the plenary the S&D group leader stated: “Genocide can’t be the response to terrorism. You do not defeat terror by killing 67,000 Palestinians, including 20,000 children, nor by turning Gaza into a wasteland where two million people live without water, medicine, electricity, food or hope.”

Moreover, García called on the Commission and EU leaders to listen to citizens from all over Europe who are peacefully urging the European Union to suspend the EU-Israel association agreement, impose sanctions on Netanyahu’s government, implement an arms embargo and support a reconstruction plan for Gaza.

A European Citizens’ Initiative (ECI), “Justice for Palestine,” collected approximately 1.3 million signatures from EU citizens demanding that the European Commission fully suspends the EU-Israel Association Agreement over documented human rights violations in the Palestinian territories.

The 1.3 million signatures are currently undergoing official verification by EU member states. Once they are validated, the organisers will present the initiative at a public hearing in the European Parliament and await an official response from the European Commission.

The EU rule book states that in order to propose a brand-new law there is a minimum of one million signatures.

Members from across the board have come to call for a stronger European response.

“Our longstanding and consistent position is that international law must be applied consistently and equally to all, without selectivity or exceptions,” MEP Giorgos Georgiou of the GUE/NGL group told en.philenews.

“The EU–Israel Association Agreement cannot remain in force as long as Israel continues to systematically violate international law, international humanitarian law, and human rights. The human rights clause set out in Article 2 must be applied consistently, not selectively” he said.

Antonio López-Istúriz, the European People’s Party’s (EPP) spokesperson underlined that “the Palestinian population in Gaza must be protected and have access to enough food supplies, clean water, medicines, and safe housing.”

The Group also condemned Israel’s decision to expand settlements occupied West Bank, calling them illegal and a serious obstacle to peace.

The EPP group is the largest political group in the European Parliament with 188 members from all EU member states.

Nonetheless, freezing trade and sanctioning Israel still requires unanimity from all 27 EU member states. The next regular foreign ministers’ meeting is due on 12 October and the matter of the review of the EU-Israel Association Agreement is expected to be high on the agenda.

What is the EU-Israel Association Agreement?

The EU–Israel Association Agreement refers to the trade relationship and cooperation framework between the European Union and Israel.

The treaty helps regulate trade and economic cooperation between the two sides. It reduces or removes many tariffs on goods, encourages investment, and supports cooperation in areas such as technology, research, and industry.

This system makes it easier for European countries and Israel to buy, sell, and cooperate economically with each other.

The EU is one of Israel’s largest trading partners, especially for goods such as machinery, chemicals, technology, and agricultural products.

It does not mean that the EU and Israel are part of the same market or customs union, it is simply an agreement between two economic partners.

Background

The EU–Israel Association Agreement was developed as part of the EU’s wider effort to build closer political and economic relationships with countries in the Mediterranean region.

Negotiations began in the 1990s, and the agreement was signed in 1995 and entered into force in 2000. It replaced an earlier cooperation framework and created a more structured partnership covering trade, investment, political dialogue, and cooperation in areas such as science and technology.

The agreement established a free trade area for industrial goods and improved access for certain agricultural products, while also creating regular meetings between EU and Israeli officials. Over time, EU–Israel relations have expanded through additional cooperation programmes, although they have also been affected by political disagreements, particularly regarding the Israeli Palestinian conflict and issues related to settlements in the occupied territories.

Why is suspension discussed?

The EU found Israel to be in breach of the human rights clause of the agreement in June 2025.

Since the beginning of Israel’s war in Gaza, following Hamas’ unprecedented cross-border attack on October 7, 2023, which killed approximately 1,200 people and resulted in the capture of around 250 hostages, Israel’s large-scale military campaign has faced growing criticism. This criticism has come from EU member states, human rights organisations, and a significant number of people around the world.

Countries like Belgium, Ireland, the Netherlands, and Spain want to go further by stopping all EU-Israel “association agreement” trade perks on human rights grounds. The UN commission of inquiry, several human rights groups and the world’s leading association of genocide scholars have concluded that Israel has committed genocide in Gaza. Israel denies the accusation.

The duty will remain in place until 2028, when a full overhaul of the EU customs system is expected. It mainly affects purchases from popular Asian platforms such as Shein, Temu and AliExpress, though it may also apply to orders from other third countries, including the US and the UK, depending on the supplier.

How the duty is applied

The three-euro duty is charged per product category within each parcel. This means that if an order includes different types of products, each category is charged separately.

For example, a parcel containing a top and shoes would be charged six euros in total duty, whilst multiple units of the same item remain charged at three euros. In other cases, a parcel with four different products could be charged 12 euros, and larger orders with many items could see a significant rise in final cost, before VAT is added.

Who is affected and why

The measure targets the sharp rise in small e-commerce shipments from outside the EU, which have surged to billions of parcels annually in recent years, the majority originating from China.

According to the European Union, the previous zero-duty regime for parcels up to 150 euros created unfair competition for European businesses whilst limiting the ability to carry out effective safety and compliance checks. The authorities also note that a large number of parcels entered the market with inaccurate value declarations or without adequate checks, increasing the risk of non-compliant or dangerous products.

Impact on consumers and platforms

Consumers are expected to see higher final costs on their online purchases, particularly for low-value orders. A 20-euro order, for example, could exceed 25 or 30 euros depending on the number of different products involved.

In some cases, additional handling fees will be added in future, which the EU is considering as part of the wider customs reform.

Platforms will have the option either to absorb the cost or pass it on to consumers. Several major e-commerce providers already operate through the IOSS system, which facilitates the collection of VAT and duties at the point of purchase.

Wider system changes

The EU is also pursuing a deeper reform of its customs framework, aimed at abolishing the 150-euro threshold and creating a single digital control system by 2028.

Under the new framework, e-commerce platforms will be treated as “deemed importers,” taking on greater legal responsibility for the safety and compliance of products they sell in the European market.

Goal: a fairer and safer market

According to European authorities, the measure aims both to protect consumers and to ensure a level playing field for European businesses.

It is also expected to ease customs checks by reducing the volume of individual small parcels and strengthening the ability to identify non-compliant products entering the EU.

The temporary tariff adds three euros per item to parcels worth up to 150 euros arriving in the EU from third countries, mainly in Asia. Parcels worth more than 150 euros already face customs charges.

Until the end of June, all parcels worth up to 150 euros from third countries reach Cyprus and the other 26 EU member states without any customs charge, a situation the European Commission found was creating unfair competition for European businesses. The only extra charge consumers currently pay on purchases up to 150 euros from third-country platforms is VAT.

Complaints

There have been many complaints in Europe that business owners made bulk purchases from these and other platforms, splitting them into parcels worth 140-150 euros to avoid paying any tax at all, unlike other businesses that brought the same products into the European market through the normal one-order process and paid tax accordingly.

Others affected too

The temporary three-euro-per-item tariff mainly targets direct shipments of small parcels worth up to 150 euros from China, via the globally popular platforms Shein, Temu and AliExpress, which is owned by the Chinese giant Alibaba. Shein and Temu are companies with Chinese ownership, headquartered in Singapore and Boston, in the United States, respectively. AliExpress is an online retail platform headquartered in China, operating exclusively as an online store.

What about the US and UK

It is possible that the temporary three-euro-per-item tariff will also apply to purchases from companies or platforms in the United Kingdom and the United States, since these are also third countries. On that basis, purchases from Amazon could also be affected by the tariff, though to a lesser extent, since much of what is sold to Cyprus and other EU partners comes from warehouses or producers within the EU.

Although the Commission’s decision concerns “small parcels” from third countries, it does not make clear whether the measure will also apply to American and British retail groups such as eBay, Walmart Marketplace, ASOS and OnBuy.

These groups are distinct from the low-cost platforms based or operating out of Asia.

The Customs Department issued an announcement on the imposition of the temporary three-euro-per-item tariff on online purchases of up to 150 euros from outside the EU. The sale must be made by a seller registered under the IOSS (Import One-Stop Shop) regime; Shein and Temu are both registered with IOSS, through which VAT is also paid.

The measure will remain in effect until 2028, Customs Department spokesperson Giorgos Konstantinou told Phileleftheros. He said the EU’s new Customs Data Hub will be operational by then, at which point the standard tariff rate will apply.

Examples of charges

Phileleftheros set out how the temporary three-euro tariff will be applied to parcels worth up to 150 euros, and what happens with Chinese platforms that hold warehouses in Europe.

A parcel from Shein, Temu or a similar platform containing ten different items — for example trousers, two pairs of shoes, underwear, pyjamas, tops, hair accessories, bracelets, a jacket, a swimsuit and slippers — with an initial bill of 150 euros will cost the consumer 180 euros from July 1, before VAT is added. That works out as an extra tariff of 30 euros, or three euros per item ordered.

Someone buying tools, kitchen items, linens and a pair of shoes from Temu, for example, with an initial bill of 100 euros, will see that rise to 112 euros once the temporary tariff is applied — four items at three euros each.

A consumer who buys 20 tops with an initial charge of 120 euros will pay a tariff of just three euros, taking the final bill to 123 euros, because they ordered only one type of item.

Someone buying 50 glasses from Temu at a price of 80 euros will pay 83 euros once the temporary tariff is added.

A consumer who buys a product on Amazon from a seller based in China or the US will pay a three-euro tariff on top of the price — for example, 103 euros on a 100-euro item. If the same product is bought from an Amazon supplier in Germany or Italy, the temporary tariff will not apply.

EU warehouses and the temporary tariff

Where products from Shein, Temu or similar third-country platforms are shipped in bulk to the EU and stored in warehouses in member states, the temporary tariff will be charged when the goods enter the country where the warehouse is located, and will be paid by the warehouse owner or operator. If they do not pay it, the cost will fall to the end consumer, for example someone in Cyprus or Greece.

According to Konstantinou, Shein and Temu’s policy is to charge all costs at the time of the original order. He also urged consumers who find that orders from Chinese-owned platforms are delivered to them from within Europe to contact the company directly and request a refund of the temporary tariff.