11 - Five Ways Canadian Businesses Can Adapt After the End of the De Minimis Exemption

If your Canadian business exports or ships products under $800 to the U.S., you’ve likely felt the impact of the recent U.S. de minimis exemption changes. As of August 29, 2025, the United States eliminated duty-free entry for shipments under $800. Now, every parcel faces U.S. tariffs on Canadian goods, with charges based on product value.

The disruption was evident immediately: international postal traffic to the U.S. dropped 80% in just one week, and even major brands like Lululemon anticipate hundreds of millions in new tariffs. For Canadian exporters and small businesses, the impact is even sharper. Cross-border trade between Canada and the U.S. is tightly integrated, with products often crossing the border multiple times before reaching consumers. The de minimis exemption, which existed since 1938, kept cross border commerce frictionlessthis, without it, every crossing now adds cost and complexity.

While some U.S. tariffs may be challenged in U.S. courts, the elimination of the de minimis exemption appears likely permanent. For Canadian businesses navigating U.S. trade rules, adapting is critical. Below, I outline five practical strategies Canadian exporters can use to adapt to these changes and protect their bottom line.

1. Check CUSMA Compliance

If your product qualifies under CUSMA rules of origin, you may still be able to ship duty-free to the U.S. Ensure your supplier and production processes meet the requirements and complete the necessary documentation. Even partial compliance can reduce costs and help your business stay competitive.

2. Rethink Shipping Methods

Evaluate your shipping options, including carriers, fulfillment centers, and freight solutions, to reduce customs handling fees. Consolidating shipments can save money. Carriers like FedEx and Purolator now offer programs that bundle parcels into a single customs entry, lowering the flat-fee impact.

3. Verify Product Codes and Paperwork

Accurate Harmonized System (HS) codes and customs forms are critical. Mistakes can result in higher tariffs or delays. Consider working with a customs broker, or use platforms like Clearit to automate paperwork, streamline compliance, and reduce costly errors.

4. Leverage Government Support Initiatives

Several federal and provincial programs can help Canadian businesses adapt to new tariffs:

• B.C.’s Regional Tariff Response Initiative (RTRI). This initiative has been expanded to $1 billion over three years to support SMEs in British Columbia. Eligible businesses can apply for repayable and non-repayable contributions, helping them improve productivity, diversify markets, and strengthen supply chains.
  

• Ottawa’s Strategic Response Fund (SRF). A federal fund of $5 billion designed to help firms across sectors adapt, retool, and grow in light of new trade pressures and tariffs.
  

• Buy Canadian policy. The federal government is prioritizing domestic suppliers in its procurement, requiring local content when Canadian suppliers are unavailable, and extending these expectations across infrastructure spending, grants, loans, and Crown corporations.
  

• BDC loans. The Business Development Bank of Canada has increased its loan maximum for SMEs from $2 million to $5 million under the new tariff relief measures. This provides extra liquidity and more flexible financing for firms experiencing tariff-related challenges.
  

• Sector and region-specific incentives. More than $370 million has been allocated for biofuels incentives to support agriculture and domestic producers of renewable diesel and biodiesel. This aims to help offset some costs and competitiveness issues for producers in these sectors.

Explore these initiatives to see what funding and resources your business may qualify for, don’t leave opportunities on the table.

5. Talk to Your Customers

Transparency is key. Be upfront about new costs or potential delays and update your website, checkout process, or marketing messaging. Acknowledge the changes, show empathy, and share a heartfelt message of gratitude, people want to hear from you, especially your loyal customers. Clear communication helps maintain trust and strengthens long-term relationships.

Closing Thoughts

The end of the de minimis exemption is a reminder that the business landscape is always evolving. Canadian businesses are resilient and creative. By staying proactive, rethinking supply chains, exploring new strategies, and leveraging available support, you can adapt and thrive, no matter the challenge.

About the Author
Mari Gutierrez is a lawyer for entrepreneurs and advocate of women-led businesses. She helps Canadian business owners navigate complex regulations and grow their businesses with confidence.

Keywords:
Canada-U.S. shipping, de minimis exemption, CUSMA compliance, Canadian exporters, government support for SMEs, BDC loans, tariffs on Canadian goods, Canadian small business advice