The European Union (EU) plans to levy a flat fee of €2 on billions of small packages entering the bloc, mainly from China, in a fresh blow to online retailers such as Temu and Shein.

Trade commissioner Maroš Šefčovič told the European Parliament he had proposed a handling fee on Tuesday to deal with the challenges of the 4.6 billion items annually imported directly to people’s homes.

The European Commission draft proposal, says the €2 fee will apply to direct sales but that items sent to warehouses will be taxed at €0.50.

Some of the resulting revenues would cover the cost of extra customs checks, while the remaining money will be directed to the EU budget.