Originally Published on: August 1, 2025, 11:06 am

Two Significant Changes to Canada-US Trade Relations

Effective within the past week:

1. Elimination of De Minimis Exemption

The United States has terminated the de minimis exemption for Canadian shipments, effective August 29, 2025. Previously, packages valued under US$800 could enter the United States duty-free. Going forward, all shipments will be subject to either full duties or flat fees, regardless of value. This change particularly impacts small-scale e-commerce transactions and low-value shipments, substantially increasing costs for modest trade flows.

2. Increased Base Tariff Rate

The United States has raised its base tariff rate on Canadian imports from 25% to 35%. This rate applies to goods that do not qualify for preferential treatment under the Canada-United States-Mexico Agreement (CUSMA).

CUSMA Exemptions and Qualifications

Most raw materials and basic commodities exported from Canada—including unprocessed agricultural products, minerals, and basic chemicals—remain eligible for duty-free treatment under CUSMA, provided they:

• Meet the minimum 51% North American content requirement
• Possess appropriate certification

Products that fail to meet CUSMA origin requirements face the full 35% tariff.

For example, coffee beans grown in Colombia, roasted in Canada, and exported to the United States would not qualify for CUSMA benefits and would incur the 35% duty.

Sector-Specific Measures: Metals

The Canadian metals sector faces additional trade barriers:

• Steel and aluminum imports from Canada have been subject to 50% tariffs since June 4, 2025
• The United States recently implemented universal 50% tariffs on copper imports; however, most Canadian copper products are exempt from this measure

Summary

The current trade framework maintains duty-free access for most basic Canadian exports that comply with CUSMA requirements. However, non-compliant goods now face a 35% tariff rate, with no relief available for low-value shipments following the elimination of the de minimis exemption. Steel and aluminum exports face an additional 50% tariff, creating a particularly challenging environment for these sectors.

2026-01-09 11:07:19