Thunder Bay Entrepreneurs and Consumers Could See Higher Costs and Slower Deliveries

THUNDER BAY – BUSINESS NEWS — A major change in U.S. trade rules is set to impact Canadian businesses and consumers starting August 29, 2025. The United States is eliminating its long-standing US$800 duty-free threshold for Canadian shipments, meaning all packages crossing the border will now be subject to duties and taxes.

Most goods will face a 35% duty, and all parcels must include proof of prepaid duties in the form of a Declaration ID before being accepted for shipping. Without proper documentation, packages risk being delayed, returned, or refused at the border.

What’s Changing?

Until now, Canadians selling into the U.S. benefited from the de minimis threshold that allowed shipments valued under US$800 to enter duty-free. For small businesses, this made cross-border e-commerce more competitive and affordable for American buyers.

Starting August 29:

• No shipments are exempt. Every package, regardless of value, requires prepaid duties.

• Most items face a 35% duty, though some categories may vary.

• A Declaration ID proving duty payment must be included with every parcel.

Canada Post & Zonos® Partnership

To help businesses comply with the new rules, Canada Post has partnered with Zonos®, a cross-border commerce platform specializing in international duty and tax solutions.

The integration aims to streamline the prepayment process, reducing risks of delays and ensuring customers receive shipments without surprise charges.

This partnership will be critical for small businesses that depend on U.S. markets, particularly in Northwestern Ontario, where many entrepreneurs ship specialized products, crafts, and goods south of the border.

Impact on Small Businesses

For small businesses in Thunder Bay and across Canada, the new tariffs could mean:

• Higher costs: A 35% duty significantly increases the price of goods sold to U.S. customers.

• Administrative burden: Merchants must calculate, collect, and remit duties before shipping.

• Customer hesitation: Higher final costs may reduce U.S. demand for Canadian-made products.

• Potential for delays if shipments are missing Declaration IDs or duty payments.

Businesses relying heavily on Etsy, Shopify, Amazon, or direct-to-consumer sales in the U.S. may be the most affected.

Consumer Impact

For Canadian shoppers ordering from U.S.-based retailers, the changes also carry ripple effects. While the new rule specifically applies to Canada-to-U.S. shipments, experts warn of potential retaliatory trade measures or adjustments in how U.S. businesses price and ship to Canada.

Preparing for the Change

To adapt to the new requirements, Canadian businesses should:

• Register with Zonos® through Canada Post or another compliant platform.

• Update e-commerce platforms to include duties at checkout for U.S. customers.

• Communicate clearly with customers about potential price changes and shipping requirements.

• Review product pricing strategies to offset higher duties without losing competitiveness.

A Shifting Trade Landscape

The removal of the duty-free threshold underscores broader Canada–U.S. trade tensions. For Northwestern Ontario, where many businesses rely on cross-border commerce, the change may pressure entrepreneurs to find new markets, adjust pricing, or expand within Canada.

The full extent of the impact will emerge in the months following implementation, but one thing is clear: cross-border shipping just became more complicated and more expensive.