All That Cheap Chinese Stuff Is Now Europe's Problem

President Trump's closure of the de minimis customs loophole in May -- which previously allowed Chinese packages valued under $800 to enter the U.S. duty-free -- has redirected a flood of cheap goods toward Europe, where similar exemptions for packages under $175.8 in the EU and $180 in the UK remain intact.

The shift has been swift: exports of low-value Chinese packages to the U.S. have dropped more than 40% since May, according to Chinese customs data, and the EU has this year overtaken the U.S. as the largest market for China's roughly $100 billion cheap package trade.

Shipments to Hungary and Denmark have quadrupled, and those to Germany, France, and the UK have risen 50% or more. Temu has recorded seven straight months of double-digit U.S. sales declines, per Consumer Edge data tracking credit and debit card transactions. Its European sales, on the other hand: up 56% in the EU and 46% in the UK since May compared to a year ago. The EU agreed last week to impose a $3.5 fee on imported small packages starting in July and to close the de minimis exemption entirely by 2028. The UK plans to follow in 2029.

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