A recent shift in U.S. trade policy is creating new challenges for Canadian small businesses that rely on cross-border sales. With the end of the U.S. $800 de minimis shipping exemption, low-value packages sent from Canada to American customers are no longer entering the country duty-free. For many small exporters, this change means higher costs, added paperwork, and uncertainty about the future of their U.S. sales.
According to an Associated Press report, Canadian sellers who once shipped goods directly to U.S. consumers without tariffs are now facing customs duties, brokerage fees, and longer delivery times. These added expenses are already forcing some businesses to raise prices or pull back from the U.S. market altogether.
Why the Shipping Exemption Mattered
The de minimis rule played a critical role in supporting small, direct-to-consumer brands. Artisans, specialty retailers, and online sellers used it to compete with larger companies by keeping prices affordable and shipping simple. Gayle Smith Gay, a longtime small business owner, notes that policies like this often determine whether small operators can realistically compete beyond their borders.
Without the exemption, even low-cost items may now trigger duties that surprise customers upon delivery. In many cases, the added fees can rival the price of the product itself.
Rising Costs Threaten Cross-Border Sales
Industry groups warn that the financial strain could be significant. The Canadian Federation of Independent Business reports that a large share of Canadian exporters expect negative impacts from the change, with some questioning whether they can continue selling into the U.S. market at all. For businesses already navigating inflation and rising operating costs, this policy shift adds another layer of pressure.
Gayle Smith Gay emphasizes that small businesses often lack the resources to quickly overhaul logistics or absorb unexpected costs. For Canadian sellers, the loss of predictable, low-cost shipping could reshape entire business models.
What Small Businesses Are Doing Next
Some Canadian entrepreneurs are adjusting by focusing more on domestic customers, increasing transparency about tariffs, or exploring fulfillment partnerships within the U.S. Others are reassessing pricing strategies to offset new fees. While these steps may help, they also highlight how dependent many small businesses are on stable trade policies.
As cross-border commerce continues to evolve, the end of the de minimis exemption serves as a reminder that even small regulatory changes can have outsized effects on small businesses—both in Canada and beyond.
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