1st September 2026
For years, consumers have become accustomed to an extraordinary proposition.
You can sit at home in Britain, order something from a company thousands of miles away and have it delivered to your door for a price that sometimes seems almost too cheap to be real.
A dress for a few pounds. A phone accessory for less than the cost of a sandwich. Household goods that can travel halfway around the world for surprisingly little money.
Companies such as Shein and Temu built enormous businesses around that model.
But governments in America and Europe have decided that the system has gone too far.
The old rules governing low-value imports are being dismantled. The United States has ended its de minimis exemption. The European Union has introduced a €3 customs duty on low-value parcels, while Britain has announced that it will eventually remove its own £135 customs-duty relief.
And that raises a fascinating question.
Who actually wins when the cheap-parcel loophole disappears?
The obvious answer might be that Shein and Temu lose.
But the real answer is more complicated.
Amazon could be one of the winners.
And then there is an even bigger question.
Are governments now beginning to redesign the tax system itself around the way we shop?
The Shein and Temu problem
The attraction of the Shein and Temu model was not simply that the products were manufactured cheaply.
It was the combination of cheap manufacturing and an exceptionally efficient way of getting individual products directly to consumers.
Millions of small parcels could be sent across borders.
The de minimis rules meant that low-value shipments could receive favourable customs treatment, reducing both the cost and administrative burden.
That helped make it possible to sell extremely cheap products directly from overseas factories.
But the economics change when every small parcel becomes subject to customs charges and greater administrative requirements.
The European Union has introduced a temporary €3 customs duty on low-value consignments worth up to €150. A €3 charge may not sound like much, but put it against a €5 or €10 item and it becomes significant.
It is one thing to add €3 to a €100 purchase.
It is quite another to add €3 to something costing €5.
That is precisely why the very cheapest products are potentially the most vulnerable.
Amazon operates a different model
This is where Amazon becomes interesting.
Amazon is not simply another Shein or Temu.
It is also a huge logistics business.
A third-party seller can send thousands of products to an Amazon fulfilment centre in Britain, America or Europe. The goods can then be imported in bulk and stored locally before individual customers place orders.
That is a fundamentally different model from sending millions of individual parcels directly from China to consumers.
The customs cost still exists, of course.
But it is dealt with when the goods enter the country rather than trying to exploit the economics of millions of tiny individual shipments.
Amazon's fulfilment network therefore becomes potentially more valuable as governments close the low-value parcel loophole.
The irony is rather striking.
Governments are trying to make competition fairer by removing an advantage enjoyed by overseas direct-to-consumer platforms.
But one consequence could be to make Amazon's existing distribution infrastructure even more attractive to overseas sellers.
The Chinese seller may simply move inside the warehouse
Imagine a Chinese manufacturer selling a £10 gadget.
Under the old system, it might send the gadget directly to a British customer.
Under the new system, the manufacturer might decide it is better to ship 20,000 gadgets in one consignment to Britain, clear customs, put them in a warehouse and then send individual orders domestically.
The product has not changed.
The manufacturer has not changed.
But the logistics have.
And that is the direction in which the market is likely to move.
Shein and Temu can also respond in this way.
The more expensive it becomes to send individual parcels directly from China, the greater the incentive to hold inventory closer to customers.
In effect, the new regulations could encourage Shein and Temu to become more like Amazon.
But Amazon is not immune
There is an important qualification.
Amazon has millions of third-party sellers, and many of them are overseas businesses.
Some sellers have built their businesses around extremely cheap imported products.
If those products become uneconomic because of customs duties, VAT, environmental charges or other regulation, some sellers may simply disappear.
That could reduce the enormous range of cheap products available through Amazon.
Amazon therefore faces a balancing act.
It wants its marketplace to contain as many products as possible because choice attracts customers.
But it also needs sellers to remain profitable enough to stay on the platform.
The changes could therefore produce both winners and losers inside Amazon itself.
Then comes the warehouse question
This is where the argument gets even more interesting.
Small retailers have been complaining for years that the tax system is stacked against the traditional high street.
A shop in a town centre occupies a physical property and pays business rates. It employs people locally and contributes to the surrounding economy.
An online retailer may instead concentrate a huge amount of its activity in a relatively small number of enormous distribution warehouses.
It would be wrong to say that Amazon simply doesn't pay business rates. It does.
But the question being asked by retailers and politicians is whether the existing system properly reflects the economic impact of that change.
If one enormous warehouse replaces the need for hundreds of shops, should the tax burden remain structured primarily around the physical shops that have disappeared?
That is becoming an increasingly important question.
Britain is already changing business rates
The Government has already moved in this direction.
From April 2026, the business-rates system introduced a higher multiplier for the most valuable properties, including many large distribution warehouses.
The Government has said that large distribution warehouses are expected to pay about £100 million more in business rates in 2026/27, helping to fund lower rates for retail, hospitality and leisure properties. (questions-statements.parliament.uk)
That is not a warehouse tax in the sense of a completely separate tax.
But economically, it moves in that direction.
The largest properties are being asked to contribute more.
And the political argument is straightforward.
If the high street is struggling partly because shopping has moved online, should some of the tax burden move towards the infrastructure that has benefited from that change?
Could there be an online sales tax?
This is where things become particularly interesting.
The Government has previously considered an Online Sales Tax which would have placed an additional charge on online retail sales.
The idea has not disappeared completely.
A recent House of Lords question asked whether the Government was considering a hybrid business-rates system incorporating a digital tax on online sales.
The Government responded that it had considered an Online Sales Tax but that previous evidence suggested there would be significant difficulties in designing and administering one. It also warned that such a tax could ultimately increase prices for consumers. (questions-statements.parliament.uk)
That response is revealing.
It tells us that the idea is not simply a newspaper speculation.
It has been examined by government.
The difficulty is deciding what exactly should be taxed.
Is it the value of online sales?
The profit made from them?
The size of the warehouse?
The number of parcels?
Or the value of the land and property being used?
Each approach creates winners and losers.
The warehouse may become the new high street
There is an argument that deserves more attention.
For much of the twentieth century, the high street was the physical centre of retail.
Businesses rented shops.
Customers visited them.
Workers travelled into town centres.
Local authorities collected business rates from those properties.
The internet has changed that model.
The modern shopping centre can increasingly be a vast warehouse on the edge of town.
Customers never visit it.
There may be hundreds of employees rather than dozens.
Thousands of products can leave the building every hour.
And the economic activity that once happened across an entire town centre is concentrated in one enormous building.
That does not automatically mean the warehouse should be heavily taxed.
But it does raise a fundamental question:
Should Britain's tax system continue to be based so heavily on where a business's buildings are located when the way businesses actually operate has changed so dramatically?
Amazon could therefore face two opposing forces
This creates a fascinating situation for Amazon.
The end of de minimis could make Amazon's warehouses and fulfilment network more valuable because overseas sellers need somewhere to store goods locally.
But changes to business rates could simultaneously make those warehouses more expensive to operate.
Amazon could therefore benefit from the regulatory changes affecting Shein and Temu while also becoming a more obvious target for tax reform.
That is an unusual position.
It is both a potential winner from the new customs regime and a potential target of the new tax regime.
Britain is now moving in several directions at once
The customs issue is only part of the picture.
The UK Government has announced plans to remove the customs-duty relief for imported goods worth £135 or less.
British retailers have argued that the change should happen much sooner because they believe overseas platforms have enjoyed an unfair competitive advantage.
The Government is also examining changes to VAT liability for online marketplaces.
And business rates have already been adjusted so that the most valuable commercial properties, including major distribution warehouses, face a higher multiplier.
Put all those developments together and a pattern begins to emerge.
The Government is gradually moving towards making digital and overseas commerce bear more of the costs associated with the economic activity it generates.
And then there is the environmental question
The tax debate does not stop with customs and business rates.
France has gone further by introducing penalties on some fast-fashion products sold by companies such as Shein and Temu.
The argument is that the environmental cost of producing enormous quantities of cheap clothing should also be reflected in the price.
That introduces another possible direction for taxation.
Could governments eventually impose charges based on the environmental impact of products?
Could packaging become more heavily taxed?
Could products with particularly short lifespans face additional charges?
Could companies be required to contribute more towards recycling?
None of these ideas is inevitable.
But once governments begin looking beyond traditional customs duties and VAT, the range of possibilities becomes much wider.
The small business dilemma
There is also a warning here for small businesses.
A system designed to make Amazon, Shein and Temu pay more could unintentionally create additional bureaucracy for a small British online retailer.
A business selling handmade products from Caithness should not need a team of tax lawyers simply to comply with international online-sales rules.
That is why any reform needs to distinguish between closing loopholes used by multinational businesses and burdening genuinely small enterprises.
The technology exists to make tax collection much more automatic.
The challenge is designing the rules so that compliance is simple for small businesses but difficult to avoid for very large ones.
The consumer will ultimately pay something
There is another uncomfortable reality.
Taxes do not disappear.
If customs duties rise, some will be paid by businesses.
Some will be absorbed in margins.
Some will be passed to consumers.
If business rates rise, businesses will look for ways to recover the cost.
If environmental charges increase, product prices may rise.
There is therefore no guarantee that a fairer tax system means cheaper shopping.
Quite the opposite.
Consumers may have to accept that the extraordinary bargains of the past decade were partly made possible by a tax and regulatory system that governments are now deciding was no longer appropriate.
So who wins?
The answer is not simply Amazon.
The likely winners are companies that can adapt.
Large retailers with sophisticated logistics will be better placed than small companies that rely on direct international shipping.
Domestic retailers could benefit if the competitive gap narrows.
Warehousing and logistics businesses could benefit as more goods are imported in bulk and distributed locally.
Amazon could gain from the demand for its fulfilment network.
Shein and Temu could survive by changing their models and moving closer to their customers.
The biggest losers could be the businesses whose entire competitive advantage depended upon sending tiny, extremely cheap parcels directly from overseas.
And consumers may lose some of the extraordinary bargains to which they have become accustomed.
We may be watching a tax revolution in slow motion
This is perhaps the most important part of the story.
The changes to de minimis are not an isolated customs reform.
The changes to VAT are not isolated tax adjustments.
The higher business-rates multiplier for large warehouses is not simply a technical alteration.
And environmental charges on fast fashion are not merely about clothing.
Together they suggest something much bigger.
Governments are beginning to redesign taxation around the digital economy.
The old system was largely built around physical shops, physical borders and easily identifiable businesses.
The new economy is built around platforms, warehouses, algorithms, international supply chains and millions of individual online transactions.
Tax systems are struggling to catch up.
The question now is how far governments will go.
Will we eventually see a specific online sales tax?
Will large warehouses face a more substantial property tax?
Will marketplaces become responsible for collecting more taxes from their sellers?
Will environmental charges become a normal part of the price of imported goods?
And will governments eventually decide that the most important question is not where a company is registered, but where it sells, where its customers live and where its economic activity actually takes place?
That could fundamentally change the way businesses think about international online trade.
For consumers, it may mean fewer £3 bargains.
For small retailers, it could mean a more level playing field.
For Amazon, it could mean both opportunity and a much larger tax bill.
And for governments, it represents an enormous challenge.
The cheap parcel may be disappearing. The bigger question is whether the tax system that grew up around it is disappearing too.