How Trump’s de minimis exemption rule change will hit Canadian businesses

Packages valued at or under US$800 sent to the U.S. outside of the international postal network will now face 'all applicable duties' starting Aug. 29.

U.S. President Donald Trump is ending a key exemption to his tariffs — the de minimis exemptions — and experts say the move could hurt small business owners in Canada.

Under an executive order signed by Trump on Wednesday, 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.

“The de minimis tariff exemption is a provision in U.S. law whereby shipments of $800 or less are eligible for duty-free treatment as well as exemption from formal entry requirements,” said Christine Abely, an assistant professor at the University of New Hampshire’s Franklin Pierce School of Law.

“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 Abely, who specializes in U.S. international trade law.

The tariff rate on these low-value packages will depend on what Trump has imposed on the product under the International Emergency Economic Powers Act (IEEPA), Abely said.

De minimis exemptions allow low-value Canadian exports to enter the U.S. duty-free, with minimal customs paperwork, said Daniel Snow, managing partner at Ontario-based Traffix Logistics.

These exemptions play a crucial role in facilitating fast and affordable cross-border shipping for Canadian e-commerce merchants, especially small businesses and independent sellers, he said.

“Niche manufacturers, including producers of artisanal foods, customized apparel, and specialized components like 3D-printed parts, would be especially vulnerable due to their slim profit margins,’ Snow said.