De Minimis Rule Scrapped: What It Means and How a Customs Broker Can Help

On August 29, 2025, the United States will eliminate its long-standing de minimis exemption. This rule previously allowed shipments valued at US$800 or less to enter the U.S. duty-free. For Canadian small and medium-sized businesses, this exemption created a low-barrier gateway to the American market. With the exemption gone, every shipment, no matter how small, will now be subject to duties, taxes, and additional clearance requirements. 

This change introduces new costs and new risks for Canadian exporters. More importantly, it adds layers of complexity that many businesses are not prepared to handle. That is where working with an experienced custom broker in Canada becomes essential. 

What Was the De Minimis Rule? 

The de minimis exemption was first introduced in 1938. At the time, it applied only to imports valued at US$1 or less, reflecting the belief that small-value shipments were not worth the administrative effort of collecting duties. Over time, the exemption increased. In 2015, the threshold was set at US$800 — a major boost for Canadian businesses, particularly those in e-commerce. 

For a decade, the exemption made it easier for Canadian retailers and manufacturers to reach American buyers. Sellers of clothing, crafts, books, electronics, and specialty food products could ship directly to U.S. customers without additional costs at the border. This created predictable pricing and faster clearance times. 

Why Has the U.S. Eliminated the Rule? 

The U.S. administration has described the exemption as a “loophole” that enabled an influx of low-value imports without duty collection. Authorities have also cited national security concerns, pointing to cases where small parcels were used for smuggling restricted goods. By removing the exemption, the U.S. aims to increase revenue collection and tighten oversight on cross-border flows. 

For Canadian businesses, however, the timing could not be more disruptive. Exporters who rely on consistent U.S. demand will now face additional costs, and small businesses in particular may struggle to absorb them. 

 

What Does This Mean for Canadian Exporters? 

The removal of the exemption will impact Canadian businesses in several ways:

1. Increased Costs for Buyers and Sellers Every shipment under US$800 will now require duty and tax payment. Canadian businesses will need to decide whether to absorb these costs, pass them on to U.S. customers, or reconfigure their pricing models. 

2. Potential Loss of U.S. Customers With higher landed costs, American consumers may turn to domestic alternatives. For small Canadian e-commerce sellers, maintaining competitiveness will require careful cost management. 

3. Administrative Burden Even small shipments must now include complete customs documentation. Errors in tariff codes, valuation, or country-of-origin declarations can cause costly delays. 

4. Impact on Seasonal Sales Canadian businesses that rely on U.S. holiday shoppers will face higher risks if they are unprepared. A single mistake during peak season can result in lost orders and reputational damage. 

How Custom Brokers in Canada Can Help 

The complexity of U.S. customs clearance has just increased dramatically. A custom broker in Canada is not simply a paperwork processor but a strategic partner who ensures compliance, reduces costs, and keeps shipments moving. Here’s how they help in the new trade environment: 

1. Accurate Tariff Classification 

With the exemption gone, proper HS code classification is more important than ever. Misclassification can lead to overpayment of duties or penalties. Brokers ensure goods are coded correctly to minimize costs. 

2. Predicting Landed Costs 

Brokers provide clear landed cost estimates, allowing Canadian businesses to adjust pricing or negotiate with U.S. buyers in advance. This prevents surprise expenses and maintains customer trust. 

3. USMCA Guidance 

Not all goods will face the same duty impact. Brokers identify when goods qualify for preferential treatment under the Canada–United States–Mexico Agreement (USMCA), reducing or eliminating tariffs where possible. 

4. Real-Time Compliance Support 

Brokers stay current with CBSA and U.S. Customs and Border Protection updates. As regulations shift, businesses receive immediate guidance to stay compliant. 

5. Streamlined Documentation and Clearance 

From commercial invoices to certificates of origin, brokers prepare and review documents before submission. This prevents clearance delays and helps shipments arrive on time. 

6. Duty Relief and Mitigation Programs 

Brokers help businesses access duty deferral or drawback programs, as well as bonded warehouse solutions. These tools can significantly reduce financial pressure during the adjustment period. 

Preparing Your Business for the Change 

Canadian exporters can take practical steps now to avoid disruption: 

• Review your product classifications with a licensed broker before August 29. 

• Update pricing strategies to account for new duties. 

• Communicate with U.S. customers about potential changes in shipping timelines or costs. 

• Engage a custom broker early to forecast scenarios and develop contingency plans. 

Why Hemisphere is the Right Partner for Canadian Exporters 

At Hemisphere, we understand that customs clearance is no longer just a formality. With over 40 years of experience, our team has guided Canadian businesses through countless regulatory shifts. We specialise in: 

• Cross-border trade expertise between Canada and the U.S. 

• End-to-end customs solutions, from classification to final delivery. 

• 24/7 support, ensuring your business never faces a challenge alone. 

• Industry-specific knowledge, whether you operate in retail, manufacturing, agriculture, or e-commerce. 

  
  

When the U.S. eliminates the de minimis exemption, Canadian exporters face a new trade reality. But with the right custom broker in Canada, the transition can be managed smoothly. Hemisphere provides the compliance expertise, operational support, and forward-looking strategies you need to continue selling confidently into the U.S. 

Conclusion: Turning a Challenge Into an Opportunity 

The end of the de minimis exemption may feel like a setback, but it is also an opportunity to strengthen your trade practices. Businesses that adapt quickly, with the guidance of experienced custom brokers, will continue to grow, even in a more complex environment. 

By preparing now, engaging with trusted partners, and building resilient processes, Canadian businesses can protect their margins, maintain their U.S. customer base, and emerge stronger in the face of regulatory change. 

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