The Toronto Region Board of Trade recently published a piece that challenges a common assumption in our sector: that Canadian products move into the US tariff-free. As many of you are discovering, the reality is far more complex, particularly regarding the de minimis exception.
For many Canadian food brands, especially those growing their direct-to-consumer presence or shipping smaller volumes to the US, the de minimis threshold was a vital tool for avoiding the hurdles of complex Rules of Origin and associated duties. With changes and stricter enforcement surrounding these exceptions, the cost of doing business across the border is shifting significantly.
I am interested in hearing from the YODL community about how these changes are impacting your operations:
How has the elimination or tightening of the de minimis exception affected your bottom line or US export strategy?
Are you finding that products you previously assumed were duty-free under CUSMA are now facing unexpected tariffs?
What steps are you taking to mitigate these challenges? Are you exploring US-based fulfillment, adjusting your pricing models, or perhaps re-evaluating your target markets altogether?
Understanding these real-world impacts helps us better comprehend the current pressures on the Canadian food ecosystem. Please share your experiences or any strategies you have found effective in the comments below.
Hi Alex, we are a family-owned food manufacturer, based in Delhi, Ontario. We used to ship a fair bit of product to the US, either directly or through Faire, a B2B platform. We have recently made the difficult decision to stop those shipments to the US. We will continue to serve our larger US customers who we can ship using pallets, but we won't do any more small orders using couriers. Our product has been and remains tariff free. However, we found after Aug 29th that the normal couriers (UPS, Fedex, DHL) were holding all of our shipments and then eventually returning them, even though we had filed and attached all appropriate documentation (Commercial invoice, Prior Notice, USMCA Certificate). Recently, it looked as if we might have a solution through Fedex, as they at least started asking for the documentation electronically, rather than automatically returning the product. However, that process was still super inefficient. One shipment required me to respond to 21 emails! Fortunately for us, the US was not a big part of our business, while Asia is. 30% of our business is with Korea. I just returned from a trip to Korea and Japan and found the opportunities to be quite promising across the entire Indo-Pacific region. It amazes me that people just assume that we have to deal with the US because it's so close; being geographically close does not mean it is easy. Equally, being far and in another language does not mean it will be hard. I have found potential customers in Japan, Taiwan, Australia, China and more in Korea, and all are just as easy, if not more so than working in the US. That's where I am spending my efforts, in addition to making sure we secure our best market, here in Canada.
Mark, this is exactly the kind of situation that gets missed when people reduce the conversation to tariffs. The product can qualify just fine and still become unattractive to ship if every smaller order turns into holds, emails, and returns.
Keeping pallet business and stepping away from courier orders is a pretty clear signal that the pressure is showing up in the shipment architecture, not just the trade rules.
And your last point is right. Proximity is not the same thing as ease.
Wow super interesting Mark thank you for sharing your experience. I have heard from others that these kind of shipment issues are actually the problem now vs the actual tariffs. Some of our innovation projects have actually involved costs to send staff down with product - literally driving the product to a test partner or potential customer in Georgia or Seattle, vs shipping bc stuff is getting stuck at the border.
I love that your horseradish is appealing to Asian markets! We've heard that for CDN brands, there are great niche opportunities in Asia!
My partner Frank has had a hankering for some horseradish- so I am visiting your website next to learn more about you.