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Note: All Prices are in CAD (can use currency converter on website to change prices to other currencies like USD)
What is the de minimis exemption and how does it affect Canada to USA Trade?
The "de minimis" exemption, as it relates to trade between Canada and the United States, allowed shipments of goods valued at $800 USD or less to enter the U.S. duty-free and with simplified customs procedures. This has been particularly impactful for e-commerce and direct-to-consumer businesses shipping low-value goods from Canada to the U.S.
How it affected Canada to U.S. trade
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Cost savings: The exemption allowed Canadian businesses and consumers to avoid duties, taxes, and a full customs clearance process on goods valued under $800, making cross-border trade faster and cheaper.
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E-commerce boost: Many Canadian e-commerce businesses built their models around the de minimis rule, relying on the low-cost entry point into the U.S. market.
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Streamlined shipping: For Canadian companies exporting to the U.S., particularly smaller businesses and craftspeople, the simplified process offered by the de minimis exemption was crucial for their operations.
What The end of the U.S. de minimis exemption mean for U.S. CUSTOMERS
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Impact on Canadian businesses:
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Higher Costs: Shipments from Canada (and all other countries) will now be subject to applicable duties and taxes, potentially raising the landed cost of goods for U.S. consumers.
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Increased Compliance Burden: Businesses will face new customs compliance obligations, including the need for proper classification, detailed shipping documentation, and potentially, customs entry filings for previously exempt low-value shipments.
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Returns: Returns will also be affected, as goods sent back to the U.S. will no longer be eligible for duty-free re-entry, potentially leading to double-taxation and increased complexity in the returns process.
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Impact on Consumers: U.S. consumers who previously enjoyed duty-free purchases from Canadian online retailers or marketplaces may experience higher prices on certain goods due to the new tariffs.
In Summary (PLEASE READ):
Effective August 29, 2025, the U.S. is eliminating the de minimis exemption for all countries.
All US-bound shipments will require a formal customs clearance. It is unclear if merchandise purchased past August 29th can still be shipped to the United States duty-free as per the USMCA agreement on all Canadian manufactured goods.
This means if USMCA compliant goods do end up not being duty free, not only will they still require formal customs clearance but will ALSO HAVE other associated costs for the customer.
What will those costs be to the US customer? We still do not have a clear answer, but again, it will be the responsibility of the US customer to pay for any applicable duties, tariffs, and/or custom charges the US poses on its US residents.
Please Note that all of this is subject to change, and we will do our best to keep you all as informed as possible as we learn about and navigate these changes. For more information, please follow the links:
https://www.pwc.com/ca/en/services/tax/publications/tax-insights/us-eliminates-de-minimis-shipment-exemption-2025.html
https://travel.gc.ca/returning/customs/bringing-to-canada/personal-exemptions-mini-guide