By default, postcss-loader looks for configs in a cascading manner upwards from the imported css file (in your case outside of the webpack project root directory). You can configure the loader to use a specific path (instead of using the cascading logic from the location of the imported file) by setting the config.path option. This can be done by customizing your webpack configuration using one of the methods described in the docs. A working example would be

module.exports = {
  configureWebpack: config => {
    config.module.rules = config.module.rules.map(r => {
      r.use = r.use.map(u => {
        if (u.loader === 'postcss-loader') {
          u.options = {
            ...u.options,
            config: {
              path: './'
            }
          }
        }
        return u
      })
      return r
    })
  }
}

I am not 100% sure you have to go this route, but each individual style loader (css, sass, scss, styl, etc. ) are updated using this logic

@dhensche Thanks, it helps a lot!