The European Union's formal cancellation of the 150-euro duty-free threshold for cross-border small parcels, effective July 1, 2026, is fundamentally reshaping the business logic for Yiwu's cross-border merchants. Under the new policy, parcels valued under 150 euros are now subject to a 3-euro temporary tariff per product category, with additional customs clearance administrative fees.
The impact on Yiwu's small commodity export model has been immediate and significant. Industry calculations show that low-value small parcel operating costs have risen 20-35%, with products priced under 30 euros suffering the most severe impact — profit margins have shrunk by 30-50%. For parcels containing multiple product categories with different HS codes, taxes stack further, compressing margins even more.
The policy change is accelerating a structural shift in the cross-border e-commerce industry. Temu has closed some domestic warehouses in Guangdong and accelerated the construction of self-operated overseas warehouses in Germany and Poland. The platform's fulfillment strategy is shifting from domestic-stockpiled small parcel direct mail to overseas-stocked local fulfillment — a signal that the entire industry is moving in this direction.
For many Yiwu merchants, the transition is challenging. The direct-mail model previously allowed merchants to simply deliver goods to domestic warehouses with low entry barriers. The overseas warehouse model requires merchants to directly face inventory accumulation risks, overseas storage costs, and return losses — demanding higher capabilities in product selection judgment and capital reserves.
Delivery speed has become a new competitive weapon. Where overseas consumers previously accepted delivery cycles of ten-plus days, competitors offering local-warehouse 3-day delivery are eroding the conversion rates of merchants still relying on direct mail. Many Yiwu merchants are adjusting strategies: some reducing low-price European SKUs, some testing overseas warehouse stocking, and others shifting focus to Southeast Asia, the Middle East, and Latin America where policy impacts are smaller.
Looking ahead, the EU plans to further revise the tariff structure from July 2028, replacing the flat 3-euro tariff with a five-tier classification system ranging from 0% to 17% — which will have an even greater cost impact on small and medium sellers.
