End of U.S. Duty-Free Rule Sparks Cross-Border Commerce Shake-Up

 

Cal Green, the owner of Ottawa streetwear label Raised by Wolves, says he is pivoting his business toward Canadian customers as the United States eliminates duty free shipping for low-value packages.

Canadian small businesses are bracing for a major blow as the United States ends its long-standing de minimis exemption this Friday, removing duty-free entry for shipments valued under US$800. The change, enacted by executive order, means all goods entering the U.S. will now face applicable duties and require full customs documentation.

For many e-commerce sellers, the exemption was a lifeline—allowing them to compete in the U.S. market without the added costs and delays of formal customs clearance. Now, businesses like Ottawa’s streetwear label Raised by Wolves and vintage retailer The Vintage Crate warn that higher prices, increased paperwork, and slower deliveries could drive away American customers.

Industry experts predict the 35% duty on most goods will hit small-scale Etsy, eBay, and Shopify sellers hardest, while large retailers may absorb the costs more easily. Shipping companies are scrambling to implement systems for pre-paid duties, but uncertainty remains over how smoothly the transition will go.

With U.S. sales making up a significant share of revenue for many Canadian entrepreneurs, some are already pivoting to focus on domestic markets. Others fear the change could force them out of cross-border trade entirely.