Small businesses in British Columbia are preparing for a financial hit from the U.S. elimination of de minimis exemptions on shipments.
The Latin phrase de minimis means “lacking in significance.” The exception in the U.S. allows parcels under $800 to enter the country duty-free. U.S. President Donald Trump signed an executive order in July suspending the exemption for all countries, as of Aug. 29.
This is a major concern for small business owners like Natalie Vance, whose online jewellery business Faunaluss makes 80 per cent of its sales to American customers.
“It’s definitely affecting me in a pretty big way,” said Vance, who lives in the Greater Vancouver Area. “My sales have definitely decreased a considerable amount in these past few months.”
She said shipments are being held up at the U.S. border longer, and in some cases were sent back because their origin wasn’t stated clearly enough.
Once the de minimis exemption is no longer in force, Vance says she will have to pass that increased cost onto her U.S. customers.
Vance added she is trying to adapt by targeting her products more toward Canadian buyers and other international markets.
A survey by the Canadian Federation of Independent Business (CFIB) conducted earlier this month found 46 per cent of B.C. businesses expect to be affected by the removal of the de minimis exemption.
Ryan Mitton, CFIB’s Director of Legislative Affairs in B.C., said the change will impact a wide range of businesses, from hobbyists selling their creations on Etsy, to grocery stores importing products from the U.S.
The changes come amid a mounting U.S.-Canada trade war that has seen Trump raise tariffs on some Canadian goods to 35 per cent, and prompted counter-tariffs from Canada.
Prime Minister Mark Carney announced Friday Canada would be removing retaliatory tariffs on all goods covered under the Canada-U.S.-Mexico Agreement (CUSMA). Canada is maintaining its steel, aluminum and auto tariffs.
“One thing the federal government could do is return all the counter-tariff money that’s been collected from U.S. products back to small businesses so they can reinvest in their operations and pay their employees,” said Mitton.
Victoria-based clothing retailer ANIÁN manufactures all their goods in Canada, and their products are covered under CUSMA, but CEO and President Paul Long said the de minimis changes will have a significant effect on the business on the business,
“It’s more paperwork on everything,” said Long.
Long said about 20 per cent of their sales come from the U.S. He said, rather than do paperwork on each individual sale, they are looking to set up a distribution warehouse facility in the U.S., adding to the company’s expenses.
“Unfortunately, I think it will result in higher price points for customers all around,” said Long.
“All of this is happening so fast, and there’s the off-chance that [Trump] just doesn’t follow through next week, but we have to plan as if he will,” he said. “Canada is our primary market…but to lose about 20 per cent of your market just like that can hurt anybody. So, with that in mind, we just need to stay positive and adapt quickly.”
He added the Canada Border Services Agency’s (CBSA) program for cross-border shippers, known as CARM, has also been causing headaches for businesses.
The agency launched the program in October 2024, after several delays, aiming to streamline the way taxes and duties are collected on commercial goods imported into Canada.
But a CFIB survey in May found nearly half of importers were not registered. The business advocacy group said confusion around the program is leading to disruptions to supply chains and cross-border trade problems.
“The increased compliance burden and complicated registration process are already deterring some businesses from scaling up or getting involved in international trade at all,” said Corinne Pohlmann, Executive Vice-President of Advocacy at CFIB, in a statement.
Long said the new program came at the worst possible time for businesses. “It has done nothing but hinder business’ ability to maneuver in this trade war,” he said.
Maja Reimnitz, a logistics supervisor with B.C.-based Seawings Express, which offers freight forwarding and cross-border shipping between Victoria and Blaine, Wash., said the removal of Canadian retaliatory tariffs is a positive for the company.
But she said the U.S. scrapping the de minimis rule is worrying because it means they likely will not be able to offer returns to the U.S. unless customers go through a broker.
“A lot of individuals, if they order the wrong shoes, or if the wrong part was sent to them, I don’t think they’ll be interested [in that],” said Reimnitz.
She added exports are also being delayed more often at the border, often interrupting their regular freight schedule. “If we were to continue doing returns, that would just increase,” she said.
She said she expects Seawings will be able to weather the trade storm but has seen businesses shut down under the pressures.
