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A 25% tariff on all Canadian imports into the United States went into effect yesterday AM. Without getting into what I think about that, and acknowledging that the situation seems to be very much subject to change, I wanted to take a minute to quickly answer some questions about what “tariffs” mean for our US customers. In short : nothing has changed … yet. Our shipments to the United States have never been exempted from “tariffs” ; we have always just used what is called the “de minimis exemption”, which allows for relatively low value (under $800USD) shipments to enter the United States tax and duty free (this exemption exists for all countries ; it is not Canada specific). The “de minimis exemption” exists in the United States to minimize paperwork for US customs officials and to facilitate the flow of small, international shipments to US customers and small businesses. It was substantially increased by the Obama administration in 2015 to accommodate surging e-commerce volumes. The $800USD threshold is supposed to strike the ideal balance between ease of trade and revenue loss for government. The Trump administration is trying to remove the “de minimis exemption”, for better or for worse, but, so far, has not been able to do so. The “de minimis exemption” was briefly suspended - for China only - and customs got so backed up that they had to quickly reverse course in order to restore order. I expect US customs to eventually have the resources in place to remove the exemption, if the idea continues to be pursued, but for the time being, the “de minimis exemption” remains completely intact and unchanged. Therefore, our e-commerce business with the United States continues, pretty much as it always has. In a nutshell : the $800USD “de minimis exemption” that we use to get our goods into the United States tax and duty free remains intact (for now), so our e-commerce business with the United States continues, unchanged. It’s worth noting, as well, that there are (creative, but legal) ways to get orders over $800USD into the United States under the “de minimis exemption”. We can work these out on a case by case basis. It’s best to get in touch with us before placing orders that cross the $800USD “de minimis” threshold, so we can talk strategy before the paperwork is done. Once / If the “de minimis exemption” is removed, all e-commerce entering the United States from Canada will incur a 25% duty, sales tax and a brokerage fee, but we’ll cross that bridge when we get to it.
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