New US Import Duty Rules Effective August 29, 2025: A Guide for Canadian eCommerce Sellers

On August 29, 2025, the US ended the USD 800 de minimis exemption. This change means all packages shipped to the US now face import duties, regardless of the value. Even a phone case costing CAD 10 or clothing costing CAD 50 will incur taxes.

For Canadian eCommerce sellers, this has significant effects on delivery costs, carrier services, and customs clearance.

Key Takeaways

• The 800 USD de minimis exemption is gone—all shipments to the US are now subject to tax.
• Postal shipments incur flat fees of 80 to 200 USD per package (until February 2026).
• Canada Post and other carriers have suspended the DDU option due to these changes.
• DDP (Delivery Duty Paid) is now required; DDU is being rejected.
• Duties are non-refundable on customer returns, increasing seller costs.
• Sellers must provide COO, HS codes, product details, and importer IDs for every shipment.
• To adapt, sellers should switch to DDP, display duties at checkout, update their policies, and explore US warehousing options.

Understanding the New Duty Rules

The most significant update is the removal of the 800 USD duty-free threshold. Previously, US buyers could order goods valued under 800 USD without paying import duties. This exemption gave Canadian merchants a decisive advantage when selling to their US consumers.

However, under the new rules, every order entering the US is now subject to duties, regardless of value.

Temporary Flat-Fee System for Postal Shipments

To ease the transition, the US has introduced a temporary flat-rate duty system for postal shipments, which will remain in place until February 2026. Instead of calculating exact duties for every item, shipments are assigned a flat fee based on the tariff rate of the goods:

• Tariffs ≤16% → 80 USD per package
• Tariffs 16–25% → 160 USD per package
• Tariffs >25% → 200 USD per package

If a shipment contains items from multiple countries, the highest applicable tariff rate applies to the entire package. It means even one high-tariff product can push the whole parcel into the top duty category.

Examples of Duty Costs

• Canadian-made product: Canada’s average tariff is about 35%, so packages typically fall into the 200 USD duty tier.
• Australian-made product: With tariffs of around 10%, the flat duty is only 80 USD.
• Chinese-made product: Goods from China are subject to a 30% tariff, placing them in the 200 USD duty tier.

Impact on Postal Carriers

The sudden policy change has caused major disruptions in cross-border logistics. Several national postal carriers have suspended their DDU option, including:

• Canada Post
• Australia Post
• Hongkong Post
• SingPost
• NZ Post

The suspension will remain in effect until they update their systems and pricing structures to align with the new duty rules. Sellers who rely on these carriers may need to consider alternative shipping solutions in the meantime.

Challenges Ahead for Canadian Online Sellers

The new rules present several challenges for Canadian eCommerce businesses, especially those that rely heavily on US buyers. Let's break them down:

Higher Costs

The average US-bound order from Canadian sellers is approximately 85 USD. With new duties ranging from 80-200 USD per shipment, the duty alone may equal, or even exceed, the value of the product. This makes cross-border sales less competitive, forcing sellers to rethink their pricing, margins, and product strategies.

Customer Frustration

If duties and taxes are not calculated at checkout, shoppers will be surprised with additional fees when their package arrives. Unexpected charges are one of the biggest causes of cart abandonment, negative reviews, and even chargebacks. Sellers who don't adjust risk losing customer trust and repeat business.

Returns Become Risky

Unlike shipping fees, duties are non-refundable. If a customer returns an item, the seller cannot recover the duty that has already been paid. This makes policies like "free returns" much more expensive. For many businesses, absorbing this cost isn't sustainable. It will only force them to rethink return terms and customer expectations.

Stricter Compliance

Customs authorities are now scrutinizing shipments more carefully. Sellers must provide detailed information to avoid clearance delays or rejected shipments, including:

• Country of Origin (COO) for each item
• Harmonized System (HS) codes to classify products
• Accurate product descriptions and material breakdowns
• Incoterms (e.g., DDP vs. DDU) that clarify who pays duties
• Importer ID (EIN or SSN) for US entries

Failure to include these details increases the risk of costly delays and dissatisfied customers.

Turning Challenges into Opportunities with Stallion’s 3PL Fulfillment Solutions

Despite the challenges, Canadian sellers can minimize disruptions by making strategic adjustments:

Switch to Delivery Duty Paid (DDP)

Most carriers are now rejecting Delivery Duty Unpaid (DDU) shipments, where customers can pay fees upon delivery. By switching to DDP, sellers prepay duties, ensuring parcels clear customs smoothly. It provides customers with the full cost upfront—reducing surprises, disputes, and negative reviews.

Use Landed Cost Calculations

Integrating tools that show all costs at checkout builds transparency and trust. The customers should know what they are paying for, such as:

• Product price
• Shipping cost
• Duties and taxes

Shoppers are more likely to complete purchases when they see the total price rather than facing hidden fees later.

Update Your Shipping Policy

A clear, upfront shipping and returns policy is crucial. Sellers should state that duties are included in the price and non-refundable if an item is returned. The transparency reduces misunderstandings, prevents disputes, and protects profit margins.

Consider US Fulfillment with Stallion

One of the most effective strategies is to store inventory in a US-based warehouse. By fulfilling orders domestically within the US, sellers avoid cross-border duties altogether. It enables faster delivery times, lower shipping costs, and ultimately happier customers.

Stallion offers affordable US fulfillment services designed to support Canadian sellers in scaling their cross-border operations.

Bottom Line

The removal of the de minimis exemption has made US shipping more expensive and complex. Canadian sellers face higher costs, stricter documentation requirements, and potential customer pushback.

With Stallion, you don’t have to face these challenges alone. Our DDP shipping solutions and US fulfillment services help you remain compliant, protect your margins, and deliver a seamless shopping experience to your US customers.

Next Step: Contact Stallion today to learn how we can help you deal with the new duty rules and ship smarter to the US.

Jose Sagun

Jose is Stallion's Senior Business Analyst. He helps improve the company’s shipping processes, works closely with delivery partners, and looks at shipping data to find the best prices for our customers. Outside of work, Jose has a passion for running, regularly completing 5k and 10k runs, with the goal of running a full marathon in the near future.