Businesses seeing drop in US customers during holiday season amid tariffs

Businesses outside the United States, including in Canada, are seeing a drop in American customers during the holidays because of the added costs from tariffs and other fees.

At Fleece & Harmony, a woolen mill and yarn shop in bucolic Belfast, Prince Edward Island, owner Kim Doherty used to be able to send yarn skeins to U.S. customers across the border with little fanfare.

The yarn orders usually met an import tax exemption for packages valued at under $800, meaning it could be imported tariff-free and avoid the customs process.

But ever since the Trump administration eliminated the exemption as of Aug. 29, the cost to send yarn to U.S. customers has skyrocketed.

The bill for a US$21 ball of yarn now includes $12 to $15 in brokerage fees that her shipper UPS charges, plus state taxes and a 6.5 per cent tariff, all of which almost doubles her costs.

“We had orders that have reached the customers and they’re in shock about the fact that they have to pay,” she said. “And it’s amazing how many people really didn’t know what the impact was going to be.”

Getting rid of the so-called de minimis exemption was meant to curb drug trafficking and stop low-quality goods from discount sellers like Temu and Shein flooding the U.S. market.

But as the all-important annual holiday shopping season kicks off, it is putting a crimp on small businesses and shoppers now facing higher costs.

Chad Lundquist in Fort Lauderdale, Florida, ordered fragrance oil from a site called Oil Perfumery in October, but he didn’t realize the business was based in Toronto, Canada. His total was $35.75, which included an $8 standard shipping fee. But when his package arrived, he was hit with a $10.80 tariff bill from FedEx.