For Canadian companies shipping low-value goods to U.S. customers, business fundamentally changed on August 29, 2025. The Trump administration’s Executive Order 14324 suspended the de minimis exemption, eliminating the US$800 duty-free threshold that has facilitated cross-border commerce for decades.

Understanding the De Minimis Suspension
The de minimis exemption, derived from Latin meaning “of minimal importance,” previously allowed goods valued at US$800 or less to enter the U.S. duty- and tax-free under Section 321(a)(2)(C) of the Tariff Act of 1930. Originally designed to reduce administrative costs and encourage small business participation in international trade, this threshold was raised from $200 to $800 in 2016 to support e-commerce growth.

Now, all commercial shipments require full customs documentation and may be subject to International Emergency Economic Powers Act (IEEPA) tariff rates based on country of origin. For goods manufactured in China, the current IEEPA rate is 34% for most products.

Critical distinction: While commercial shipments face immediate full customs clearance, postal shipments continue to transit until U.S. Customs and Border Protection establishes new entry processes, but must adhere to a new duty collection framework.

Immediate Impact on Canadian Businesses
The suspension hits hardest in sectors dependent on direct-to-consumer e-commerce sales, including consumer goods, health and wellness products, electronics, and specialty brands using online platforms. According to Export Development Canada’s David Weiner, “exporters can expect higher shipping costs, new compliance burdens and greater risks of shipment delays.”

Companies using third-party logistics providers under Section 321 face immediate service cost increases and operational disruptions. The challenge extends beyond costs—maintaining speed and ease of service, key expectations for online consumers, becomes significantly harder without strategic adjustments.

Canada Post’s Zonos Partnership Solution
To address postal shipment requirements, Canada Post partnered exclusively with Zonos to provide Declaration ID compliance. Every U.S.-bound postal package must now include a 13-character Declaration ID proving duties were prepaid before border crossing.

Canadian merchants have two Zonos options:

Zonos Verified Account (High-Volume Shippers)

$1.99 remittance fee per shipment
10% disbursement and bond fee on calculated duties
Automatic billing with uninterrupted clearance
API integration with SnapShip and Shipping Manager
Platform subscription covered by Canada Post
Zonos Prepay App (Occasional Shippers)

$3.99 remittance fee (CAD converted)
10% processing fee
$1 CAD photo discount feature
Mobile app for iOS and Android
Ideal for micro-businesses
CUSMA’s Complex Role
The Canada-U.S.-Mexico Agreement (CUSMA) still provides duty-free treatment for qualifying goods, but with a critical limitation: CUSMA preference cannot be claimed for postal shipments under Executive Order 14324. Postal shipments face IEEPA tariffs regardless of CUSMA qualification.

This creates a strategic inflection point. Commercial channel shipments can still claim CUSMA benefits through formal customs entries, while postal shipments lose this advantage. For CUSMA-eligible products, businesses must weigh postal convenience against commercial channel duty savings.

Essential Implementation Strategies
Immediate Assessment Actions
Product Analysis: Identify affected SKUs and map current de minimis dependencies. Canadian businesses should review 10-digit Harmonized Tariff Schedule codes for accuracy and prepare detailed product descriptions with country-of-origin documentation.

Channel Decision: Compare postal channel costs (Zonos fees + IEEPA tariffs) against commercial channel expenses (brokerage fees + potential CUSMA benefits). For many CUSMA-qualifying products, commercial shipping may prove more cost-effective despite increased complexity.

Strategic Business Model Adaptations
E-commerce and Direct-to-Consumer Brands must evaluate U.S.-based fulfillment centers to maintain delivery speed expectations. Consolidated shipments to U.S. warehouses can reduce per-unit costs while preserving customer experience.

Manufacturers and Component Suppliers should consider bulk shipping strategies and educate U.S. clients on new cost structures. Revising Incoterms to clarify duty responsibility becomes essential for B2B relationships.

Subscription Box and Specialty Brands may need to establish U.S. distribution centers or partner with domestic 3PL providers to maintain service levels and customer retention.

Professional Support Team Assembly
Success requires assembling the right expertise:

U.S. Customs Brokers and Trade Consultants help strengthen compliance frameworks, particularly boutique firms better equipped to serve SMEs with specialized guidance on product classification and documentation requirements.

Logistics Consultants and 3PL Partners optimize shipment flows and calculate landed costs across scenarios. They can evaluate Foreign Trade Zone options and bonded warehouse strategies for added flexibility.

Legal Advisors should review sales agreements and Incoterms to clarify duty liability allocation, ensuring contracts reflect new cost structures while protecting business interests.

Cost-Benefit Analysis Framework
The financial impact varies significantly by business model. For postal shipments, costs include Zonos fees plus country-specific IEEPA tariffs with no CUSMA benefits. Commercial shipments involve traditional brokerage fees but potential CUSMA duty-free treatment for qualifying goods.

Many businesses find U.S. fulfillment center investment worthwhile. As EDC’s David Weiner explains, “U.S.-based distribution—whether through their own warehouse or a 3PL partner—can both lower per-unit freight costs and ensure faster delivery to customers.”

Special Situations and Compliance Considerations
Document-only shipments remain exempt, but mixed shipments lose this advantage. Gift shipments under $100 require “Unsolicited Gift” labeling and person-to-person criteria—business names disqualify the exemption.

U.S. Territories including Puerto Rico, Guam, and the Virgin Islands require Declaration IDs. Goods over US$800 need Declaration IDs but face normal tariff rates without additional processing fees.

Long-Term Strategic Planning
The suspension represents more than regulatory compliance—it’s a strategic transformation opportunity. As EDC’s Carley Mortimer notes, “The suspension of de minimis is more than a regulatory update, it’s a strategic inflection point. Exporters must rethink how they deliver value to U.S. customers.”

Companies adapting quickly can capture market share from non-compliant competitors while building competitive advantages through superior compliance, transparent pricing, and maintained service quality. CUSMA-eligible businesses particularly benefit from duty-free commercial shipping advantages over overseas competitors facing minimum 15% additional duties.

Frequently Asked Questions
Q: What is a Declaration ID and why is it required? A: A Declaration ID is a 13-character code proving you’ve completed customs declaration and paid required duties. Under U.S. regulations, every postal parcel under US$800 must have duties prepaid. Without a Declaration ID, Canada Post cannot ship your item to the U.S.

Q: Can I still claim CUSMA duty-free treatment after the suspension? A: Yes, but only for commercial channel shipments through formal customs entries. Postal shipments cannot claim CUSMA preference under Executive Order 14324 and face IEEPA tariffs regardless of qualification.

Q: Do I need to pay duties if I’m shipping documents only? A: No duty is required for document-only shipments (legal papers, certificates, diplomas). However, mixed shipments with any goods or merchandise lose this exemption.

Q: What happens to shipments already in transit before August 29, 2025? A: CBP may either return the parcel or assess duties and bill Canada Post through Zonos. In the latter case, Canada Post covers the cost on your behalf.

Q: Should I use Zonos for goods valued over US$800? A: Yes, a Declaration ID is still required for all shipments. However, no duty will be charged or invoiced for goods over US$800 as they follow normal tariff procedures.

Q: What are my options for handling U.S. duties as a merchant? A: You can pass costs to customers at checkout, include duties in U.S. pricing, or absorb costs to maintain competitive pricing. The choice depends on your business model and market positioning.

Q: How do gift shipments work under the new rules? A: To qualify as a gift under $100, packages must be sent person-to-person with “Unsolicited Gift” in the description. Business names disqualify the exemption, and CBP may reclassify incorrectly marked shipments.

Conclusion
Canadian exporters cannot afford to wait. The de minimis suspension demands immediate action: reviewing supply chains, revising pricing strategies, and strengthening compliance frameworks. By engaging customs specialists, logistics partners, and legal advisors early, businesses can protect their U.S. market presence and emerge more competitive in the evolving trade environment.

Success requires treating every low-value shipment as a high-stakes transaction where accurate documentation, tariff classification, and strategic channel selection become essential for avoiding costly delays and maintaining customer satisfaction in the post-de minimis landscape. If you need Transport done right, use Nishan Transport.