A new executive order signed by U.S. President Donald Trump is set to upend a key cross-border shipping rule that Canadian small businesses have long relied on. Effective August 29, the United States will revoke the de minimis exemption, which previously allowed packages valued at US$800 or less to enter the country duty-free if shipped outside the U.S. postal system. The White House says these shipments will now be subject to “all applicable duties,” triggering widespread concern among Canadian exporters.
The de minimis exemption was originally designed to simplify cross-border commerce by eliminating duties and extensive paperwork on low-value imports. With its removal, businesses sending even small shipments into the U.S. will now be forced to navigate a maze of customs requirements and face new tariffs. Christine Abely, a trade law expert at the University of New Hampshire, explained that this rule change will primarily hit direct sellers and exporters of goods like handmade crafts, apparel, and food, especially those selling through platforms like Etsy.
Canadian logistics expert Daniel Snow, managing partner at Traffix Logistics, noted that this policy shift will deal a major blow to small and niche producers in Canada. Artisanal food makers, specialty clothing producers, and custom product manufacturers often operate with razor-thin margins. Snow warned that these businesses, many of which depend on access to the U.S. market, could be forced to either raise prices, consolidate operations, or leave the American market entirely. He cited the example of an artisan who sells $50 to $200 handmade items online and would now be burdened with duties and regulatory compliance that previously did not apply.
Ulrich Paschen of Kwantlen Polytechnic University in British Columbia emphasized that while the U.S. move is largely intended to crack down on large-scale Asian retailers like Shein, TEMU, and Alibaba sellers, Canadian businesses will inevitably be caught in the crossfire. Paschen added that Indigenous businesses, such as those producing Cowichan sweaters, would be directly affected by these changes, highlighting the broad reach of this policy.
The consequences could reshape North American e-commerce, experts say. The added costs and bureaucracy could shut out many small Canadian exporters, leaving only large firms with the resources to absorb the impact. Snow cautioned that the shift would likely hand over market share to multinational corporations while squeezing out independent sellers who have built their businesses around quick, affordable U.S. delivery.
With the policy set to take effect in late August, many Canadian small business owners are left scrambling to find workarounds or face the possibility of losing their most important international market.
