The de minimis exemption that allowed low-value packages to be shipped duty-free to the United States is now a thing of the past as an executive order signed by U.S. President Donald Trump went into effect Friday.
Under an executive order signed by Trump in July, packages valued at or under US$800 sent to the U.S. from outside of its postal network will now face “all applicable duties” starting Aug. 29, the White House said.
These exemptions, known as de minimis tariff exemptions, play a crucial role in facilitating fast and affordable cross-border shipping into the U.S. from international — including Canadian — e-commerce merchants, especially small businesses and independent sellers.
Business Matters: End of key loophole is as devastating to some Canadian businesses as Trump’s tariff threat
“Direct sellers who regularly send shipments of $800 or less from outside of United States to U.S. consumers will likely be the most impacted by this change, since they will now have to pay tariffs to the U.S. government on such shipments,” said Christine Abely, an assistant professor at the University of New Hampshire’s Franklin Pierce School of Law.
In addition to higher costs, this will also significantly increase the amount of paperwork Canadian businesses have to deal with in order to sell their products in the U.S., experts warn.
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With the exemptions removed, Canadian businesses could see a sharp drop in U.S. customers who don’t want to face the risk of additional fees or the burden of extra paperwork to receive their items.
A growing number of suppliers have also been warning they will no longer ship to the U.S. as a result.
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