Analysis: The new charge might be viewed as an irritation for online shoppers, but reflects a significant shift in the rules around global commerce
You find a bargain online for a piece of clothing, a childs toy or some homewares. It only costs a few euro, so clicking “buy now” is an easy decision. A few weeks later, the parcel arrives in Ireland and there’s an unexpected €3 customs handling charge (not to mention a €6.95 handling charge from a delivery company like An Post).
For many shoppers, that’s just another unwelcome cost. In reality, it is one small sign of a quiet shift across the global economy as governments are becoming more involved in deciding how goods move around the world, where products are made and who countries choose to trade with.
This broader trend can be described as the politicisation of supply chains. Simply put, supply chains are no longer designed solely around cost, efficiency and speed. Increasingly, they are also shaped by government policy, regulation, national security concerns and international politics. Cost still matters, but decisions once driven almost entirely by economics are increasingly influenced by politics.
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From RTÉ Radio 1’s Drivetime, new EU charges on goods valued below €150 comes into effect
From ‘where is it cheapest?’ to ‘where is it safest?’
Over the last 30 years, globalisation transformed the way businesses operated. Companies searched the world for the most efficient places to manufacture products, source materials and build supplier networks. If a product could be made better, faster or cheaper elsewhere, that was usually where production moved. The guiding question was straightforward: where can we make this most efficiently? Politics certainly mattered, but it generally stayed in the background.
Today, companies are asking a different set of questions. What happens if relations between two countries deteriorate? What if tariffs are introduced, or new environmental, social or other regulations increase costs? What if a supplier suddenly becomes subject to export controls or import sanctions, or an essential medicine can no longer be sourced? The question is no longer simply “where is it cheapest?” It has become “where is it safest?”
Why governments are becoming more involved
This change didn’t happen because businesses suddenly changed their minds. A series of global events exposed how dependent many countries had become on long, complex international supply chains. The Covid-19 pandemic revealed shortages of everything from personal protective equipment to semiconductors.
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From RTÉ Radio 1’s Today with David McCullagh, how secure is our food supply chain?
Brexit introduced new customs processes between previously open trading partners. Growing tensions between the United States and China have affected everything from advanced technology to medical products, while Russia’s invasion of Ukraine disrupted energy, food and raw material markets. More recently, governments have added environmental regulations, security reviews and trade measures designed to reduce dependence on strategically important imports.
Each individual policy may seem relatively small, but together they are changing the rules of global trade and Ireland’s new customs handling charge is one small example of that broader trend. Consumers experience these changes as an extra €3 on an online purchase, but businesses experience them rather differently. Every new customs declaration, product inspection, import rule, sustainability requirement or reporting obligation adds a little more cost, administration or delay.
Individually minor, together these begin to influence much bigger decisions. Should production stay in one country or be spread across several? Is it worth having two suppliers instead of one? Should businesses sacrifice some efficiency in return for greater resilience? These are now everyday conversations inside many organisations.
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From RTÉ Radio 1’s Today with David McCullagh, Ray Ryan, Head of Revenue’s National Customs Policies and Procedures Branch, answers listeners’ questions about the new customs tax
Politics has become part of business planning
While researching how organisations respond to geopolitical change, I interviewed 22 senior supply chain leaders working across healthcare, manufacturing, technology, transport and consumer industries. What surprised me was how normal the influence of politics on supply chains had become.
Participants described political developments as something they now monitor continuously rather than react to occasionally. Some organisations had introduced dedicated geopolitical monitoring, regular political risk reporting and scenario planning alongside more familiar measures such as exchange rates, freight costs and commodity prices. A decade ago, political events were often viewed as external risks that occasionally disrupted business. Today, many organisations plan on the basis that political intervention is simply part of how international trade works.
We often hear that globalisation is ending, but the reality is more nuanced. Goods will continue to cross borders and companies will continue to source internationally. What is changing is the framework within which those decisions are made. Cost remains important, but it now competes with resilience, regulation and political risk in ways that would have been unfamiliar a decade ago. Companies are increasingly diversifying suppliers, spreading production across several countries and building resilience into their networks. Globalisation is becoming less about finding the cheapest place to make something and more about finding the most reliable way to keep products flowing in an increasingly uncertain world.
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From RTÉ Radio 1’s Morning Ireland, shoppers warned of potential scams ahead of new customs charges
The real significance of the €3 charge
The €3 customs handling charge will probably be remembered as another irritation for online shoppers, but that misses the bigger picture. The rules governing international commerce are no longer shaped only by markets and businesses.
Governments are playing an increasingly active role through customs procedures, industrial policy, environmental legislation, national security concerns and trade regulation. Most of us encounter that shift only occasionally, perhaps through a slightly more expensive online purchase or a longer delivery time. Businesses experience it every day.
The €3 customs charge may be a small addition to an online purchase, but it reflects a much bigger change. The products we buy, where they come from and what they cost are increasingly shaped not just by markets, but by political decisions made far beyond our shopping basket.
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The views expressed here are those of the author and do not represent or reflect the views of RTÉ
