Canadian small businesses brace as duty-free shipping to U.S. ends

Canadian small businesses are facing a major setback as the United States officially ends duty-free shipping for packages under $800 US.

The de minimis exemption has existed for nearly a century, allowing low-value shipments into the U.S. without extra fees. In 2016, President Barack Obama increased the threshold from $200 to $800, making it far easier for Canadian online sellers to reach American customers.

But that advantage has now been rolled back. A July executive order from President Donald Trump eliminates the exemption, meaning packages will face duties of up to $200 US depending on the country of origin.

For some, the change is devastating. Free Label, a Vancouver-based slow fashion company, says it has stopped U.S. shipments entirely. Nearly half of its sales this year came from American buyers.

Others are trying to hold on. Cheekbone Beauty, an Indigenous-owned cosmetics company in St. Catharines, Ontario, says it will absorb the added costs temporarily, though they amount to a 25–30 per cent increase in shipping fees.

Trade experts warn the rollback will disproportionately hurt small businesses that rely on cross-border e-commerce, potentially forcing some to scale back or shut down.