Starting today (Friday), Canadian small businesses will no longer be able to ship small packages to the United States without paying customs duties, a move that has many online sellers concerned.

The long-standing de minimis exemption, which in recent years allowed goods under $800 to enter the United States without additional fees, has been repealed by an executive order from US President Donald Trump. The new exemption will now impose duties of up to $200 on packages shipped, which could put a significant financial strain on small businesses.

“Due to the high risk and lack of clarity about the new rules, we have temporarily suspended all shipments to the United States,” said Jess Sternberg, owner of Vancouver-based clothing brand Free Label, noting that nearly 45 percent of her company’s sales come from American customers, making it difficult to continue operating.

Meanwhile, Ontario-based cosmetics company Cheekbone Beauty said it would temporarily pay the additional costs of the tariffs to retain American customers. However, the company’s CEO warned that the 25 to 30 per cent increase in shipping costs is not sustainable in the long term.

Trade experts say the elimination of the exemption will hit small businesses hardest, potentially forcing some to close. Bob Kirk, president of the Canadian Apparel Federation, called the move a “double-edged sword” because it has provided small businesses with opportunities to grow and sell directly in recent years, but its removal is now a serious obstacle to innovation and development.

While it is possible to send gifts up to $100 or goods covered by the Canada-United States-Mexico Agreement, administrative costs and customs fees will continue to weigh heavily on Canadian small businesses, observers say.

Source