{"id":15296,"date":"2025-02-06T14:26:45","date_gmt":"2025-02-06T14:26:45","guid":{"rendered":"http:\/\/torontotribune.ca\/index.php\/2025\/02\/06\/what-is-the-de-minimis-exemption-why-canadian-businesses-fret-over-its-fate-national\/"},"modified":"2025-02-06T14:26:45","modified_gmt":"2025-02-06T14:26:45","slug":"what-is-the-de-minimis-exemption-why-canadian-businesses-fret-over-its-fate-national","status":"publish","type":"post","link":"https:\/\/torontotribune.ca\/index.php\/2025\/02\/06\/what-is-the-de-minimis-exemption-why-canadian-businesses-fret-over-its-fate-national\/","title":{"rendered":"What is the de minimis exemption? Why Canadian businesses fret over its fate – National"},"content":{"rendered":"


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When U.S. President Donald Trump threatened to place 25 per cent tariffs on Canadian goods last week, organic snack foods company Made with Local stopped accepting orders from customers south of the border.<\/p>\n

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The Dartmouth, N.S.-based company feared the end of a shipping exemption included in Trump\u2019s executive order on tariffs would come with big costs for customers and an administrative nightmare for the company.<\/p>\n

\u201cIf our team needs to babysit every single $70 order for two boxes of granola bars going into the States \u2026 it quickly makes it not really worth it,\u201d said Sheena Russell, the company\u2019s CEO and founder.<\/p>\n

\u201cIt\u2019s also a really tough thing to imagine that a customer is going to pay more than they already are.\u201d<\/p>\n

The issue Russell was talking about is known as the de minimis exemption<\/a>. It allows global businesses to ship packages valued at less than $800 to the U.S. without having to pay duties.<\/p>\n

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Canadian companies have long used the exemption when moving products across the border, but Trump\u2019s executive order applying impending tariffs on Canadian goods in a month\u2019s time also scraps the de minimis loophole for shipments entering the U.S. from Canada. Another order has already ended the de minimis for goods moving from China to the U.S.<\/p>\n

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Canadian companies say losing the exemptions will inflict as much damage to their business as the 25 per cent tariff he\u2019s promising to apply to Canadian goods in a few weeks.<\/p>\n

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\u201cWe are in a worst-case scenario,\u201d Katherine Homuth, CEO of Montreal-based pantyhose company Sheertex, wrote in a LinkedIn post Wednesday.<\/p>\n

The post announced the temporary layoff of 40 per cent of her 350 staff.<\/p>\n

Homuth placed much of the blame on the tariffs but also called out the removal of the de minimis exemption.<\/p>\n

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She said its disappearance would push Sheertex\u2019s costs even higher.<\/p>\n

In addition to the 25 per cent tariff, the company faces a 16 per cent duty because its products are not considered \u201cmade in Canada\u201d since more than nine per cent of its raw materials are sourced outside the U.S. and Canada, Homuth said.<\/p>\n

Eighty-five per cent of Sheertex\u2019s sales come from the U.S.<\/p>\n

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