How changes to the de minimis rules may affect your business

What are the new de minimis fees? Which businesses must pay them?

Before August 2025, if you shipped non-regulated goods under US$800 to the U.S. from Canada, you didn’t have to pay duties or broker fees. Now, every shipment requires customs brokerage and may be subject to duties depending on the tariff classification and country of origin.

For each shipment, businesses should expect to pay:

• customs brokerage fees (US$10 to $25 per order, sometimes more)
• a U.S. Merchandise Processing Fee of about US$32
• applicable duties based on the product’s Harmonized System (HS) code and origin
• surtaxes on certain imports, including steel, aluminum, copper, automobiles and parts, and many products of Chinese origin

Laurin says this means the companies most affected are e-commerce businesses with high order volumes of relatively low-value goods—along with manufacturers or distributors who regularly send spare parts, consumables or warranty items.

“I’ve spoken to businesses who are shipping $5 parts that now cost $60 to clear,” he says.

Firms that were shipping orders worth more than US$800 before the changes will likely feel less impact because they were not covered by the de minimis rules. 

What paperwork is needed to ship to the U.S.?

Every shipment now requires a complete commercial invoice with detailed information, including:

• the importer of record number
• the HS tariff classification
• the country of origin
• the value for customs

Regulated goods, like steel, aluminum or copper products, now also require mill test certificates—documents that verify the material’s composition and origin—and cost breakdowns.

Some businesses might assume that domestic manufacturing guarantees free trade access, but under the Canada-United States-Mexico Agreement (CUSMA), you must still provide a proper declaration to prove compliance. Without it, duties of up to 35% can apply. Even goods made in Canada aren’t automatically duty-free, says Laurin. 

For example, a jacket sewn in Canada from fabric imported from Asia might not meet CUSMA’s rules of origin requirements and could face duties when shipped to the U.S.

Should you pass the extra costs on to clients?

According to Laurin, you probably won’t have a choice—many businesses will need to pass them on because the new fees will add up to more than a product’s value.

“If you add $10 to $25 in brokerage fees to a $25 order, plus surtaxes, you’re losing money on every transaction,” he says.

However, absorbing the costs is also unsustainable. This means businesses will need to rethink their U.S. strategy.

Strategies for surviving changes to the new de minimis rules

There’s no question that the rule changes are going to make it harder for Canadian e-commerce businesses to serve U.S. customers. But for those determined to explore options, there are a few ideas.

Bulk ship to a U.S. warehouse

Also known as consolidation, this is one of the few viable strategies, says Laurin. “The idea is that you ship pallets of goods across the border, pay brokerage and duties once on the bulk lot, then fulfill individual orders from a U.S. warehouse or fulfilment centre.”

But it’s not as straightforward as it sounds—you can’t just rent a U.S. warehouse, for example. Nor is it risk-free. Exporters need to avoid two common missteps:

• First, goods that have not been sold yet cannot be declared at cost (i.e., production cost). U.S. Customs and Border Protection requires the value for customs to be the price actually paid or payable when sold for export to the U.S.
• Second, if selling to a U.S. entity at a transfer price—the internal price charged when goods move between related companies—exporters must prove that the U.S. company is not just an extension of the Canadian one, and that the pricing reflects an arm’s-length transaction. If you can’t prove that the U.S. entity operates on its own, then the sale will not be considered bona fide, and the agency may disregard the price for customs valuation.

In both cases, violations can trigger penalties. “The agency can retroactively reassess duties, sometimes at two to four times the normal rate, or up to 20% of the value of the imports, if no duties were applied,” says Laurin.

Some small firms are finding that third-party logistics providers (3PLs) near the border can handle warehousing and order fulfilment at reasonable rates while also lowering U.S. shipping costs.

Other workarounds

Beyond moving parts of your operations to the U.S., Laurin suggests:

• working with a U.S. customs broker (sometimes available through major couriers) to calculate duties and avoid compliance errors
• ensuring products are classified using the proper HS code to avoid unexpected duties or surtaxes
• leveraging Canadian customs brokers’ partnerships with U.S. brokers for seamless service
• exploring the use of fulfilment software or trade consultants to manage compliance and paperwork

But he stresses that there is no magic solution. “The only way to reduce costs is to reduce the number of individual transactions.”

Is there any advantage for Canadians?

Given that the new rules apply globally, some Canadian businesses might wonder if they can gain an edge over competitors in other countries by being more agile and responsive.

Laurin says for Canadian businesses focused on low-value shipments (under US$800), the main advantage is duty-free treatment under CUSMA—something competitors in most other countries don’t enjoy because reciprocal tariffs apply to their products. “So for the same product, those covered by CUSMA will be 10% to 15% cheaper than one of foreign origin—a big plus for Canadian businesses,” says Laurin.

On the other hand, Canadian businesses may feel the impacts of the new de minimis rules more keenly because they have been more reliant on cross-border sales.

Still, there may be a silver lining for exporters with higher-value orders. “If your product is CUSMA-compliant, duties are zero,” says Laurin. “While other countries face higher duties and surtaxes, Canadian goods—except for certain exemptions—retain this advantage.”

Should you stop shipping to the U.S.?

Some businesses are already pulling products from U.S. websites or stopping their cross-border sales entirely, says Laurin. For those who can’t make the numbers work, he suggests:

• strengthening domestic sales to offset lost U.S. revenue
• working with industry associations, government trade services, or consultants to identify new opportunities
• exploring market diversification (with the caveat that international markets are competitive, and the shipping can be more complex than shipping to the U.S.)

'“The U.S. was unique in how easy it used to be,” Laurin explains. “Other markets often require even more paperwork and local presence, so companies should carefully assess where they can realistically compete.”

What else can you do?

Act quickly to make any necessary adjustments to pricing or logistics before shipments are delayed or costs mount, says Laurin. Goods are already being held at customs, and disputes can be costly.

He also recommends ensuring that your sales and finance teams are talking. Review customs broker invoices against sales orders to see where losses may be occurring. “Some businesses may not realize they’re losing money on every U.S. transaction.”

Finally, monitor developments. Some of the new surtaxes are being challenged in U.S. courts, and the regulatory landscape could shift again in the coming months. Staying up to date through customs brokers, trade associations or government trade advisories can help you adapt quickly if requirements change again.

Next step

If your business is affected by the current trading landscape, BDC can help. Our Pivot to Grow loan can boost your cash flow and cover expenses, like purchasing equipment, as you adapt to a new economic reality. Find out more.