The European Union has taken another major step to curb the rapid expansion of Chinese ultra-low-cost online retailers, introducing new import fees on small parcels that had long entered the bloc duty-free.

The measure marks the latest escalation in a global crackdown on business models used by platforms such as Shein, Temu and Alibaba-owned AliExpress, following similar action by the United States earlier this year.

From Wednesday, the EU began imposing a €3 customs handling fee on low-value e-commerce imports from China that previously qualified for the bloc’s €150 “de minimis” duty exemption, a customs rule that has been in place for decades. The new charges are intended to address what European policymakers describe as widespread abuse of the exemption, which they say has given Chinese online retailers an unfair competitive advantage over European businesses.

The fees are charged per customs classification within each shipment rather than per parcel. For example, a package containing three different categories of products would incur €9 in charges, while a parcel containing several dresses or multiple toys within the same product category would attract a single €3 fee.

The move follows a dramatic surge in low-value e-commerce imports into the European Union. According to EU data, parcels entering under the exemption increased from 1.4 billion in 2022 to 5.8 billion in 2025, highlighting the explosive growth of cross-border online shopping led by Chinese platforms.

The duty-free exemption for low-value imports dates back several decades, while the current €150 threshold was introduced in 2008, long before the emergence of today’s global e-commerce giants.

EU lawmaker Dirk Gotink, who leads customs reform in the European Parliament, said the system was no longer fit for modern global trade.

“In a different trading world this made a lot of sense, but that world doesn’t exist anymore. It’s been turned on its head by e-commerce, especially from China,” Gotink said.

“The exemption was abused and misused on an industrial scale to create a competitive advantage at the expense of EU businesses.”

Global Pressure Mounts On Chinese E-Commerce Platforms

The EU’s decision comes after the United States dismantled its own de minimis exemption, first ending duty-free treatment for imports from China in May, before extending the policy to all imports at the end of August.

That U.S. crackdown had prompted many Chinese retailers to shift greater volumes toward Europe, making the bloc an important growth market. Analysts say the EU’s latest action now removes one of the last major regions where the business model remained largely intact.

Derek Lossing, an e-commerce and air cargo consultant at Cirrus Global Advisors, expects the policy to have an immediate impact on global shipping volumes.

He estimates that air shipments of e-commerce goods into Europe could decline by between 10% and 35% in the weeks following implementation.

“The question is how effective the platforms are in pivoting to other markets,” Lossing said.

“When the U.S. ended de minimis, Europe was a really good alternative that platforms could shift to – but now there’s not a really clear alternative to Europe.”

Lossing added that major platforms will likely attempt to limit the impact on consumers by pressuring suppliers to absorb part of the additional costs.

Consumer Prices Expected To Rise

While platforms may absorb some of the new expenses, analysts expect European shoppers to ultimately face higher prices as import costs are gradually passed through the supply chain.

The temporary €3 fee will remain in place until July 1, 2028, when the EU Customs Authority is scheduled to begin operations. At that point, the flat fee will be replaced by category-specific customs duties, creating a more comprehensive import regime for cross-border online retail.

Chinese retailers have already begun adjusting their operations ahead of the changes. Shein has expanded warehouse capacity in Wroclaw, Poland, allowing it to import products into Europe in bulk before distributing them across the bloc. The strategy reduces reliance on individual cross-border parcels and helps lower customs-related costs.

Alibaba-owned AliExpress said product listings will now display a “Price includes duties and VAT” label where applicable. For products where charges are not already included, customers will receive a detailed breakdown of import duties before completing their purchase.

Amazon, which launched its budget shopping platform Amazon Haul to compete with Temu and Shein, said its European operations are far less exposed to the new rules. According to the company, 97% of its EU shipments in 2025 were fulfilled from warehouses located within the European Union, limiting the impact of the new import fees.

For products shipped from outside the bloc, Amazon said customers will similarly receive a full breakdown of applicable import charges before checkout.

Retailers Welcome Tighter Regulation

The EU’s latest action reflects growing concerns among policymakers and traditional retailers that Chinese platforms have exploited customs exemptions, low-cost manufacturing and direct-to-consumer shipping to undercut domestic competitors.

European retailers have long argued that local businesses face stricter regulatory requirements, product safety obligations and tax rules than overseas competitors selling directly to consumers.

The new import charges represent one element of the EU’s broader customs reform agenda, which aims to modernize border controls, improve enforcement against under-declared shipments and create a more level playing field for European retailers.

With both the United States and the European Union now tightening restrictions on low-value imports, Chinese e-commerce companies face mounting pressure to overhaul their international logistics strategies, expand local warehousing and absorb higher operating costs as regulators move to close loopholes that fueled years of explosive global growth.

After two years of aggressive cost-cutting and promises that artificial intelligence would replace large sections of the workforce, a growing number of companies are reversing course, rehiring employees after discovering that AI systems still struggle with complex, judgment-based and customer-facing tasks.

The trend is emerging at a time when investors are questioning how quickly companies can generate meaningful returns from the hundreds of billions of dollars being poured into artificial intelligence. It also suggests that many businesses are moving away from an “AI replacing humans” strategy toward one where AI augments employees rather than eliminates them.

Among the latest companies to reverse course is Ford Motor, which is bringing back hundreds of experienced engineers after finding that automated systems could not adequately address vehicle quality issues.

The automaker said experienced human engineers remain essential in areas requiring technical judgment and real-world problem-solving.

“Artificial intelligence is a fantastic tool, but it’s only as good as the information you use to train it,” Charles Poon, Ford’s vice president of vehicle hardware engineering, said.

Ford’s decision highlights one of the industry’s biggest challenges: while AI excels at analyzing large volumes of structured data, it remains less capable when confronted with unpredictable manufacturing defects, engineering trade-offs and nuanced quality assessments that rely heavily on human experience.

Besides Ford, several large companies that previously reduced headcount in favor of AI have since reinstated workers after finding the technology unable to fully perform critical business functions.

Australia’s Commonwealth Bank (CBA) became one of the highest-profile examples.

Last year, the bank eliminated more than 40 customer service positions after deploying an AI-powered voice assistant designed to automate customer enquiries. But the system struggled to manage customer interactions effectively, contributing to increased call volumes and forcing the bank to reverse the redundancies.

“Getting CBA to rescind these job cuts is a massive win,” Australia’s Finance Sector Union said after the decision.

According to an ABC report published in August last year, the bank acknowledged mistakes in its original assessment. CBA admitted it “did not adequately consider all relevant business considerations” before announcing the redundancies and conceded that “we should have been more thorough in our assessment of the roles required.”

The experience reveals a broader issue confronting many organizations: replacing experienced customer service professionals with AI often creates new operational bottlenecks rather than eliminating them.

IBM Discovers Limits Of AI In HR

IBM has also reassessed how far AI can replace employees. The company successfully automated around 94% of routine human resources enquiries, dramatically improving efficiency in repetitive administrative work.

However, the remaining 6% proved significantly more challenging. Those requests frequently involved ethical questions, complex employment issues or situations requiring human judgment and empathy—areas where AI struggled to provide satisfactory responses.

Rather than continuing to reduce headcount, IBM announced plans to triple its U.S. entry-level hiring across all business units during 2026, recognizing that future talent pipelines require sustained investment.

“If we don’t continue to invest in entry-level hires, what happens in three-five years?” IBM Chief Human Resources Officer Nickle LaMoreaux said during the Charter AI Summit in New York.

“There’s no pipeline; the well simply dries up.”

Her comments bolster growing concern among corporate leaders that excessive reliance on automation risks creating long-term shortages of experienced professionals.

Businesses Admit AI-Related Layoffs Were Mistakes

Evidence is increasingly emerging that many companies may have underestimated the continued importance of human workers.

According to research by Orgvue, 39% of business leaders said their organizations made employees redundant because of AI deployment. However, 55% of those executives later acknowledged that at least some of those redundancy decisions had been wrong.

The findings suggest many companies moved too aggressively in replacing staff before fully understanding AI’s operational limitations.

Research from Robert Half paints a similar picture.

Data shared with CNBC found that 32% of U.S. hiring managers said they eliminated a role primarily because of AI and subsequently rehired someone for the same or a similar position. That trend indicates that while AI can improve productivity, it often cannot fully substitute for experienced workers, particularly in positions involving customer interaction, decision-making, creativity or oversight.

Industry analysts note that many organizations focused too heavily on reducing labor costs without investing sufficiently in employee training and AI integration.

According to Intuition Labs, companies frequently underestimate the importance of maintaining experienced staff capable of supervising AI systems.

“Budgeting on ‘tech to replace humans’ without investing in training or upskilling left teams unprepared to leverage AI.”

The report added that many organizations eventually regretted removing precisely the employees needed to make AI successful.

“Notably, among companies pushing automation, many later ‘regretted’ layoffs, having cut the very people needed to oversee AI.”

Human oversight has become increasingly important as businesses encounter inconsistent AI outputs, hallucinations and difficulties applying AI-generated recommendations in real-world situations.

Jessica Zhang, Senior Vice President for Asia-Pacific at HR technology provider ADP, said organizations frequently discover that AI still requires substantial human supervision.

“Where AI outputs are inconsistent, inaccurate, or difficult to apply, companies often need to reintroduce human oversight,” Zhang said.

“This can lead to duplicated effort, slower decision-making and diminished productivity gains.”

AI Shifts From Replacement To Collaboration

Rather than abandoning artificial intelligence, companies appear to be adopting a more balanced strategy in which AI enhances employee productivity instead of replacing workers outright. This shift aligns with broader industry thinking that AI delivers its greatest value when paired with skilled professionals capable of interpreting, validating and applying its outputs.

Capitol Technology University said the latest hiring trends illustrate that businesses are moving toward collaborative AI models.

“AI is changing the workplace, but it’s becoming clear that organizations are finding more value in building human-AI collaboration versus replacing human work entirely,” the university said.

The changing strategy also comes as investors scrutinize whether the massive wave of AI spending by corporations can generate sustainable returns. Technology companies and large enterprises are collectively investing hundreds of billions of dollars in AI infrastructure, software and automation, yet many executives are discovering that productivity gains often depend as much on skilled employees as on the technology itself.

The global technology rally gathered remarkable momentum in the first half of 2026, but the biggest winners were no longer America’s trillion-dollar technology giants. Instead, investors increasingly rotated into semiconductor manufacturers, AI infrastructure suppliers and international technology stocks, signaling that the artificial intelligence investment boom is broadening well beyond Silicon Valley.

While U.S. Big Tech continued to deliver solid gains despite heightened volatility, emerging markets and Asian semiconductor stocks significantly outperformed, driven by an unprecedented global race to build AI data centers, expand chip manufacturing capacity and develop next-generation AI infrastructure.

The shift also reflects a maturing AI investment cycle. After two years dominated by companies such as Nvidia and Microsoft, investors are now directing capital toward the wider AI ecosystem, including memory chipmakers, semiconductor equipment manufacturers, power infrastructure companies, robotics firms and industrial automation suppliers.

Among MSCI’s sector-specific benchmarks, the Emerging Markets Information Technology Index emerged as the standout performer, soaring more than 90% during the first six months of 2026, according to a report by CNBC.

By comparison, the MSCI Europe Information Technology Index gained 44.8%, while the MSCI USA Information Technology Index, whose largest constituents include Nvidia, Apple, Microsoft, Broadcom and Micron, advanced a comparatively modest 19.4%.

The same pattern played out across broader technology benchmarks.

Europe’s STOXX 600 Technology Index climbed 23.4%, comfortably outperforming the S&P 500 Information Technology Index, which gained 19.4%.

Meanwhile, the technology-heavy Nasdaq 100 rose 19.9%, outperforming the broader U.S. market but still lagging several overseas indexes.

The broader U.S. equity market delivered respectable returns, with the S&P 500 rising 9.55%, the Nasdaq Composite advancing 12.79%, and the Dow Jones Industrial Average adding 8.85% during the first half.

Yet each was surpassed by several major international markets.

AI Investment Reshapes Global Leadership

Emerging markets continued their strong run as investors sought companies positioned to benefit from the global AI infrastructure build-out.

The MSCI Emerging Markets Index gained 24%, while South Korea’s Kospi surged an extraordinary 101.1%, making it one of the world’s best-performing major equity benchmarks. Japan’s Nikkei 225 also delivered exceptional returns, climbing approximately 39%.

The rally has been fueled by explosive growth in semiconductor manufacturers that have become central suppliers to the AI industry.

South Korea’s SK Hynix, now one of Nvidia’s largest suppliers of high-bandwidth memory (HBM) chips, soared roughly 300% during the first half of the year as demand for AI memory continued to outstrip supply. Taiwan Semiconductor Manufacturing Company (TSMC), the world’s largest contract chipmaker, rose 55.5%, supported by robust orders for advanced AI processors.

European semiconductor equipment manufacturers also enjoyed blockbuster gains. Dutch chip equipment maker ASMI surged 93.3%, while industry heavyweight ASML gained 86.8% as global chipmakers accelerated investments in advanced fabrication plants. BE Semiconductor Industries more than doubled in value, benefiting from booming demand for advanced semiconductor packaging technologies increasingly required for AI chips.

Although AI enthusiasm remained intact, investor leadership within the U.S. technology sector became more concentrated. Nvidia, whose chips remain the foundation of the AI revolution, gained 7.3% during the first half after an extraordinary rally over the previous two years.

Other members of the so-called Magnificent Seven experienced considerably greater volatility.

Microsoft shares declined 22.9% over the six-month period as investors questioned whether soaring AI-related capital expenditure would translate into equally rapid earnings growth.

Market participants increasingly scrutinized whether hyperscalers—including Microsoft, Amazon, Alphabet and Meta—could generate sufficient returns from hundreds of billions of dollars being invested in AI infrastructure.

That reassessment contributed to one of the most notable rotations in global equity markets this year.

European equities posted relatively modest gains overall. The pan-European STOXX 600 rose more than 8% during the first half. Britain’s FTSE 100 gained 5.7%, Germany’s DAX advanced about 1.9%, while France’s CAC 40 climbed just over 3%.

Southern European markets delivered stronger performances. Spain’s IBEX 35 jumped 12.5%, Italy’s FTSE MIB gained 14.7%, and Portugal’s PSI Index added 10.5%.

Volatility Driven By AI, Geopolitics, and Monetary Policy

Global markets experienced significant turbulence throughout the period. Investors navigated uncertainty surrounding AI valuations, the U.S.-Iran conflict, rising geopolitical tensions and changing expectations for U.S. monetary policy.

The sharp sell-off that hit many technology stocks late in June reflected growing concern that elevated AI spending could weigh on corporate profitability before generating corresponding revenue.

In its mid-year investment outlook, BlackRock Investment Institute argued that artificial intelligence remains one of the most powerful long-term investment themes despite recent volatility.

“AI raises the prospect of a permanent growth breakout by accelerating innovation itself,” it said.

“Yet the route to abundance, if we get there, runs through scarcity. A similar tension is playing out across other investment themes—and reshaping portfolios.”

BlackRock said investors continue to face three major unanswered questions.

“Three questions remain unresolved: is AI becoming a bubble, how costly will it be, and who will capture the value?”

The firm maintained an overweight position on U.S. equities while recommending exposure to AI infrastructure rather than attempting to identify future model winners.

“We stay overweight U.S. equities and focus on bottleneck opportunities to participate in AI growth without picking model winners: power, grids, memory, chips and data centers. Physical AI—robots, autonomous systems and manufacturing—is the next frontier,” it added.

Interest Rates Could Dominate Second Half

While AI remains the structural driver of global markets, economists believe monetary policy could become the primary catalyst during the remainder of the year.

Anthony Willis, senior economist at Columbia Threadneedle Investments, said several headwinds that unsettled investors earlier this year appear to be easing.

“Encouragingly, some of the pressures that weighed on markets in the first half now appear to be easing.”

He said attention is increasingly shifting toward the Federal Reserve.

“As investors reassess whether the Fed may need to raise rates again—and how often—market pricing is likely to remain sensitive to incoming data and central bank communication.”

According to CME’s FedWatch Tool, markets are currently pricing a 66.3% probability that the Federal Reserve leaves interest rates unchanged at its July meeting, while assigning a 66.9% chance of at least a 25-basis-point rate increase at the September meeting.

Willis also warned that corporate earnings will become increasingly important as investors demand evidence that massive AI spending is generating sustainable returns.

“The critical question is whether companies can monetize that spending and generate an attractive return on investment,” he said.

“Expectations around AI-related capital expenditure, revenue growth and profitability are now high, which means earnings results could become an important source of market volatility.”

Analysts at Deutsche Bank believe June marked a turning point for market leadership. Strategist Jim Reid identified four major reasons behind the underperformance of the Magnificent Seven technology stocks during the month: the unwinding of crowded investor positioning, concerns about hyperscalers’ AI capital expenditure, a more hawkish Federal Reserve, and rising semiconductor costs.

“While ‘AI fever’ continues globally, with benchmarks like the KOSPI index up over 100% year-to-date, leadership in the market has shifted away from the Mag 7 for now,” Reid wrote.

The changing market leadership suggests investors are entering a new phase of the AI investment cycle, one where the beneficiaries extend far beyond America’s biggest technology companies to encompass semiconductor manufacturers, industrial automation firms, robotics suppliers, memory chipmakers and infrastructure providers across Asia and Europe. As global spending on AI continues to accelerate, analysts now expect the next leg of the rally to be driven by the companies supplying the hardware, power and industrial systems that make artificial intelligence possible.