What Canadian Sellers Should Know About the Ending of the U S De Minimis Exemption

What’s changing?

The U.S. is ending duty-free de minimis treatment for low-value shipments (≤$800) from all countries on August 29, 2025 (12:01 a.m. ET). Goods of China and Hong Kong already lost de minimis eligibility on May 2, 2025. After these dates, low-value imports are subject to all applicable duties/fees just like higher-value shipments.

Businesses must determine if they will continue shipping to customers in the US. If they choose to do so, they need to take the following considerations into account.

What this means operationally

• File entries in ACE (no paper) using the appropriate entry type. For most low-value non-postal shipments, that will be Type 11 (informal); for goods over $2,500 or subject to special measures, Type 01 (formal) with a bond. You’ll need accurate 10-digit HTSUS per item on the entry summary.

• International postal shipments: for 6 months from Aug 29, carriers may choose a specific duty per item ($80 / $160 / $200 based on the origin country’s IEEPA rate); after that, postal items move to the ad valorem method only.

• Expect added costs & some delays. CBP has stepped up enforcement, and carriers have added fees or adjusted processes on low-value flows (FedEx/UPS). Build this into lead times and pricing.

Who pays the duty now?

• If you ship DDP (delivered duty paid) / collect duties at checkout, you (or your broker) remit duties, but the customer prepaid you.

• If you ship DDU/DAP, the customer pays on delivery; risk of refusals rises.

  • (Shopify supports collecting duties/taxes at checkout — see setup below.)

How big are the duties?

• Rates depend on the 10-digit HTSUS and origin. For context, average applied U.S. tariffs on Chinese goods were estimated at ~51% as of May 2025 (varies widely by product). Always classify correctly, the HTS code determines the rate.

What hasn’t changed (two common misconceptions):

• Traveler personal exemptions remain (separate from de minimis): returning residents typically have an $800 duty-free allowance (or $1,600 from certain U.S. territories).

• Bona fide gifts sent to individuals in the U.S. can still be duty-free up to $100 under a separate administrative exemption.

Quick checklist for Canadian merchants shipping to the U.S.

1. Classify every product precisely (10-digit HTSUS).

   • Use a trusted classifier (broker/solution) and keep evidence. The 10-digit code is required on U.S. entry summaries.

2. Decide your duty strategy: collect at checkout (DDP) or have customers pay (DDU/DAP).

   • DDP via Shopify reduces surprise fees/refusals. DDU/DAP can mean carrier collect fees + unhappy customers.

3. Prepare to file in ACE (through your broker or provider).

   • Type 11 for informal; Type 01 for formal entries/regulated goods; bond required for Type 01.

4. Account for carrier fees and longer clearance times in your CX and pricing.

Final Thoughts: Keep Customers in the Loop

Whether your business decides to absorb duties (DDP), pass them along to customers (DDU), or even pause/stop shipping to the U.S. altogether, the most important thing is to be honest, transparent, and upfront with your customers.

Clear communication about shipping timelines, possible costs, and duty responsibilities builds trust and helps avoid surprise frustrations at delivery.

Remember: trade regulations shift quickly. What’s true today may change again in the months ahead. Stay informed, keep your checkout and FAQs updated, and be ready to adapt so your customers always know what to expect.