July 1 EU Shipping Changes Explained — From Our Carrier Manager

You’re probably aware of the big changes to EU shipping coming into effect on 1 July 2026. Or maybe you’re not – and we wouldn’t blame you. With constant changes to global trade and shipping regulations, it’s not always easy to keep up.

But one change that isn’t getting enough attention is the shift in EU regulations that will see low-value shipments (below €150) entering the EU subject to a €3 duty. And that duty stacks for multi-SKU orders containing items with different harmonised (HS) codes.

From July 1, there’s a real risk your shipping costs will increase significantly if you rely on cross-border shipping into the EU.

To cut through the noise, we sat down with one of our Carrier Managers, Aaron Richmond, who’s been close to these changes since they were announced. He shared his perspective on what’s happening, who will be most impacted, and how brands should prepare.

The headline: Shipping into the EU is getting more expensive. In some cases, a lot more.

Right now, low-value imports into the EU under €150 are not subject to customs duties. You collect tax at the point of purchase and, if you’re set up on IOSS, that process is relatively seamless.

From July 1, that changes.

A minimum €3 duty will apply to all orders entering the EU. The key detail is that this charge applies per tariff code, not per item:

The practical thing is that the charge is per tariff code, not per item. So if a customer orders six T-shirts and they all share the same tariff code, that’s one €3 charge. But if they order a T-shirt and a pair of shoes, that’s two different tariff codes, so that becomes €6. Every additional tariff code in the basket adds another €3. So multi-item baskets with products in different categories become much more expensive.

Aaron Richmond, Carrier Manager, J&J Global Fulfilment

At the very least, you’re looking at an additional €3 per order.

But for brands with multi-SKU baskets across different product categories, that cost can scale quickly. A €3 duty can easily become €6, €9, or €12, depending on the number of tariff codes in the order.

Your stock profile and typical order composition matter here. If your orders are made up of similar products that share a tariff code, you may still be able to ship multiple items while only paying a single €3 charge.

But if you have a broader product range and regularly ship mixed baskets, you’re likely to face a significant increase in costs if you continue business as usual.

Context matters: The EU is attempting to level the playing field, and there’s likely more change on the horizon. 

Before we get into how to forecast and adapt to these new duties, it’s worth understanding why they’re being introduced in the first place.

In simple terms, this is about competitiveness. As Aaron explains:

The motivation, really, is to level the playing field. If I’m an EU-based brand today, there isn’t always an advantage to being based in the EU, because a competitor shipping from the UK or the US can often reach the same customer at a broadly similar landed cost. The EU wants EU-based businesses to have more of an advantage than overseas businesses shipping across borders.

Aaron Richmond, Carrier Manager, J&J Global Fulfilment

To understand how we got here, it helps to look back to 2021.

In July of that year, the EU introduced the Import One-Stop Shop (IOSS). If you’re currently shipping into the EU, you’re likely already familiar with it.

IOSS was designed to simplify cross-border selling. Instead of registering for VAT in multiple EU countries, non-EU brands could collect and remit VAT through a single system, making it much easier to sell into the region.

But while IOSS reduced friction, it also contributed to a sharp rise in the volume of low-value parcels entering the EU. 

The EU Commission claims that the number of small parcels entering the EU has doubled each year since 2022. In 2024, 4.6billion small parcels entered the region, and 91% of those came from China. 

Crucially, many of these low-value orders have continued to enter the EU without customs duties, giving non-EU sellers a cost advantage over EU-based retailers.

The new €3 duty being introduced on 1 July 2026 is the EU’s attempt to correct that imbalance, support domestic businesses, and curb the volume of low-value imports entering the region.

There are, of course, broader forces at play here beyond IOSS. At its core, this change is about giving EU-based businesses a competitive advantage and encouraging consumers to buy from within the region.

Wider context also matters 

It’s also worth noting that the €3 duty is currently expected to apply until 2028, while the European Commission works towards a longer-term solution for cross-border trade. What that solution looks like is still being defined.

What is clear, however, is that this is unlikely to be the last change. The direction of travel is towards increased regulation and cost in cross-border shipping.

And this isn’t happening in isolation.

Rising transportation costs, driven in part by ongoing geopolitical tensions, are already impacting global shipping. At the same time, different markets are introducing their own measures to manage the volume and cost of low-value imports, whether through handling fees, duty changes, or broader trade reforms.

We’ve already seen similar shifts elsewhere, including the removal of the $800 de minimis threshold in the US, and ongoing discussions in the UK around potential changes to its own £135 threshold.

The €3 duty is part of a much wider trend: global cross-border shipping is becoming more complex, more regulated, and more expensive.

Preparing for July 1: Answer these five questions to help you forecast impact

So, what should you actually do?

After July 1, you have two main options:

• Continue shipping cross-border
• Localise fulfilment within the EU

Which is right for your business?

It depends, but not in a vague way. The right path forward comes down to your data: your EU order volume, margins, product mix, tariff code distribution, and typical order composition.

To get a clear view of your exposure, we asked Aaron what brands should be analysing right now. His advice was to start with your last six months’ order data and ask the following:

• How many EU orders have you shipped?
  This gives you your baseline exposure.
• What are your margins on those orders?
  This helps you understand how much additional cost you can absorb, and whether pricing changes may be needed.
• How many EU countries are you selling into?
  Useful context if you’re considering localising fulfilment.
• How many different tariff codes are involved?
  This is critical for modelling how duties will stack.
• How many orders contain multiple product categories?
  Multi-category baskets are where costs can increase quickly.
  

Answering these questions will enable you to start modelling what those additional charges could look like on a per-order basis and across your overall EU business. Once you’ve done that, you can start asking the commercial question: does it make more sense to continue shipping cross-border with IOSS, or localise into the EU?

Aaron Richmond, Carrier Manager, J&J Global Fulfilment

Once you’ve worked through this analysis, you should have a clear view of how your EU shipping costs are likely to change.

From there, the decision becomes more straightforward: continue shipping cross-border and absorb higher landed costs, or move towards a localised fulfilment model.

For some brands, cross-border will still work. If your EU order volume is relatively low, your baskets are simple, and your product range sits within a small number of tariff codes, the additional duties may be manageable, particularly if you have the margin flexibility to absorb or pass on some of the cost.

For others, the numbers will point in a different direction. If you’re shipping higher volumes into the EU, or your orders regularly include multiple product categories, those stacked duties can add up quickly. In these cases, localising inventory within the EU starts to become a much more commercially viable option.

Businesses take many forms, and it’s only for you to decide which path to take. There are people and companies that can advise, though – us included. 

Advice from our Carrier Manager: Three tips to help smooth this transition 

“First: If you plan to continue shipping cross-border, start looking at DDP solutions.”

Sending parcels via DDP (Delivered Duty Paid) means your customers won’t face unexpected charges after checkout. All duties and taxes are paid upfront, allowing parcels to move through customs with less friction and reach the customer faster.

This was already a strong approach, but after July 1 it becomes even more important. Shipping via DAP (Delivered at Place) could leave customers facing additional fees on delivery, which can lead to delays, refusals, and an all-around poor delivery experience.

“Second: Make sure your data is accurate. Get help classifying your goods if you’re unsure.”

Any forecasting or cost modelling is only as good as the data behind it.

Accurate tariff codes are critical. If your product classifications are incorrect, you risk overpaying duties, underpaying, triggering compliance issues, or creating delays at the border.

There’s also a direct cost implication. If similar products are incorrectly assigned different tariff codes, you could end up paying multiple €3 duties where only one should apply.

Historically, many businesses have been fairly relaxed about tariff code accuracy. Going forward, that becomes much more costly.

If you’re unsure about your classifications, it’s worth seeking an expert in cross-border compliance. They’ll be well-equipped to give you the right advice. 

“Third: Know your customer. Any decision you make will impact them.”

Ultimately, how you respond to these changes shouldn’t just be driven by cost. It’s important to consider customer expectations, too. 

Some customers expect a premium, frictionless delivery experience and will be far less tolerant of delays or unexpected charges. Others may be more price-sensitive and willing to accept trade-offs.

Balancing landed cost, delivery experience, and customer expectations will be key to navigating these changes successfully.

Global eCommerce never stays still for long

We hope you’ve found this write-up useful. J&J are here to help you navigate July 1, where it’s through DDP cross-border solutions or localised fulfilment within the EU.

If you want to talk about how we can help you manoeuvre through uncertain times, don’t hesitate to contact us. We’re always happy to have a no-obligation consultation. 

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