What APAC exporters targeting Europe — and beyond — need to know.

Patrick Frith, Business Development Director at Avalara, on how APAC exporters can protect growth and stay ahead of shifting global trade rules in 2026.

Why this matters for APAC exporters right now

APAC has built the world’s most powerful cross-border ecommerce engine. Exporters from China, Southeast Asia, and increasingly India have reshaped how low-value goods flow into global markets — leveraging fast parcel networks, marketplace platforms, and duty-free thresholds to compete at price points that were previously impossible. That model is now under pressure.

On 1 July 2026, the European Union — one of APAC’s most significant export destinations — changed the economics of low-value trade. Since that date, an interim flat customs duty of €3 has applied to goods that previously benefitted from a €150 duty exemption. This marks the end of the long-standing low-value relief that has shaped cross-border ecommerce into the EU for more than a decade.

Leadership teams across APAC retail, marketplaces, logistics, and ecommerce should not see this as a minor compliance adjustment, but a change that affects pricing strategy, fulfilment design, customer experience, and long-term investment in automation and data integrity. Understanding why the exemption was removed and what comes next is critical to navigating what is, in effect, a reset of low-value trade into the EU.

What was the EU €150 duty exemption and why was it removed?

Parcels valued under €150 imported into the EU from a non-EU country were previously exempt from customs duties (though they were subject to VAT rules and customs declarations). For APAC exporters, this threshold was a critical enabler — making it commercially viable to ship directly from factories and fulfilment centres in China, Vietnam, Thailand, or India to end consumers across Europe without duty adding to the landed cost.

This type of low-value consignment duty relief wasn’t an issue for the EU when parcel volumes were much lower and collecting small amounts of duty was operationally inefficient. However, with estimated daily parcel flows of up to 12 million low-value shipments into the EU, and year-on-year increases, the EU no longer saw the exemption as justified.

The exemption itself helped to reshape cross-border ecommerce into Europe. APAC exporters could launch a storefront or join a marketplace, run paid acquisition, fulfil directly from manufacturing hubs across the region, and rely on fast parcel networks. The €150 duty relief helped make that model work at scale.

Indeed, China-origin shipments account for a dominant and near-total share of EU low-value parcel traffic — 91% of the 4.6 billion+ parcels valued under €150 that entered the EU in 2024 originated from China, according to European Commission data. This record volume underscores how APAC-led, factory-direct fulfilment has come to define cross-border flows into Europe, and why this reform lands hardest on APAC exporters.

But the EU also estimates that up to 65% of small parcels entering the EU are undervalued to avoid duties — a practice that has drawn particular scrutiny to high-volume APAC export corridors.

Removing the threshold isn’t just about collecting more duty. It is part of a redesign of how the EU governs cross-border goods flows in a platform-driven economy. The long-term reform architecture — the EU Customs Data Hub, a new EU customs authority, and a more centralised approach to risk management — signals a future where customs is increasingly driven by high-quality data and automation. For APAC exporters, this means the rules of access to one of the world’s largest consumer markets are fundamentally shifting.

And the EU is not acting alone. The United States eliminated its $800 de minimis exemption in August 2025, and the U.K. has confirmed it will remove its £135 low-value customs duty relief by March 2029. APAC exporters who rely on duty-free access across multiple markets are facing a structural reset — not a single regulatory event, but a coordinated global tightening of low-value trade rules.

The impact on APAC exporters and cross-border ecommerce growth

When duty becomes part of the landed cost for low-value goods, growth strategies for APAC exporters face pressure in three places.

1) Pricing power and margin structure

Some businesses can absorb incremental duty costs. Many cannot, not without redesigning margins, sourcing, or product mix. Duty adds complexity and variability, and it can amplify the impact of misclassification or valuation errors. For APAC exporters who have built competitive advantage on low-cost, high-volume fulfilment — often with razor-thin unit economics — this recalibration is especially consequential. The business case for direct cross-border shipping must be re-modelled from the ground up.

2) Checkout experience becomes a differentiator

In an environment where customers are sensitive to unexpected delivery charges, businesses will likely compete on who can deliver transparent landed cost earlier in the journey, ideally at checkout. The EU’s reform direction reinforces this by wanting to reduce surprise fees at the door for buyers. APAC exporters who can surface accurate duty and VAT at the point of purchase — rather than passing surprise charges to consumers at delivery — will hold a distinct competitive advantage.

3) Fulfilment footprints will be reconsidered

As duties apply broadly, the strategic choice between shipping from APAC versus staging inventory inside destination markets becomes more acute. Some businesses will accelerate EU warehousing to control total landed cost and delivery outcomes. Others may maintain cross-border shipping from APAC but invest more in automation and data readiness to prevent clearance friction.

This is why the exemption’s removal is best understood as a structural shift. It changes the trade-offs between speed, cost, complexity, and customer trust, which are the foundations of cross-border growth.

HOW AVALARA CAN HELP

As the EU — and other global markets — move towards more consistent duty collection and data-driven customs oversight, manual processes will not scale. APAC businesses exporting globally will need systems capable of calculating duties and VAT in real time across multiple jurisdictions, supporting IOSS(Import One-Stop Shop) and multimarket reporting, and applying accurate HS codes and maintaining origin data.

Avalara helps organisations automate indirect tax and cross-border compliance across the transaction life cycle.

From real-time landed cost calculation at checkout, to VAT determination and reporting, to product classification support, Avalara integrates into existing systems and enables businesses to manage regulatory complexity without disrupting customer experience or slowing growth.

As reform accelerates towards a more centralised, data-led framework across the EU and beyond, APAC companies with integrated tax and customs technology will adapt more smoothly. Those relying on fragmented systems and manual intervention may find regulatory change repeatedly disrupts pricing, fulfilment, and customer trust.

In a market where transparency and automation are becoming baseline expectations, compliance capability is no longer operational overhead – it is competitive infrastructure.

 

WHAT TO DO NOW

For APAC leadership teams with global expansion ambitions, three priorities stand out.

1) Model your exposure

Analyse your EU-bound — and globally bound — parcel volumes by value band, product category, and origin. Identify how much of your revenue has historically relied on the €150 duty exemption and equivalent low-value thresholds in other markets. Then model the impact of duties applying from the first euro. This can help you understand how the economics of your business change and whether current pricing and margin assumptions remain viable across each export corridor.

2) Redesign your landed cost and fulfilment strategy

APAC businesses shipping direct-to-consumer from manufacturing and fulfilment hubs in China, Southeast Asia, or South Asia must reassess their operating model for each destination market. Some will accelerate in-market warehousing across the EU, U.K., or Australia to improve predictability and customer experience. Others may maintain cross-border shipping but shift to Delivered Duty Paid (DDP) structures to protect conversion.

The critical decision is where duties are absorbed: in margin, in price, or in fulfilment design.

3) Make transparency and data a strategic priority

As duties apply more broadly across global markets, calculation accuracy becomes commercially material. Duties and VAT must be determined correctly at checkout to avoid friction at delivery.

At the same time, product classification, origin determination, and valuation data move from back-office compliance tasks to core business controls. In a data-led customs environment, poor data will translate directly into clearance delays, margin erosion, or reputational risk — particularly for APAC exporters operating at high volume across multiple jurisdictions simultaneously.

The removal of the €150 exemption is an opportunity for APAC exporters to modernise cross-border infrastructure before complexity compounds. Those who move first will be structurally better positioned as global trade rules continue to tighten.

 

About Patrick

Patrick Frith is responsible for Cross-Border Development at Avalara, including the design of products and features related to automating global trade and cross-border tax compliance in retail and logistic environments. He is a supply chain expert who has spent over 20 years managing global trade and customs compliance operations for SMEs to global customers with DHL Express and SF Express, based in Europe, Asia, the Middle East, and North and Central America.