News

What’s Happening? Two Major Changes

Two new Executive Orders from the U.S. White House are having a significant impact on Canadian exporters. They both target goods that do not comply with the Canada–United States–Mexico Agreement (CUSMA).

1. Tariff Increases: The U.S. is increasing tariffs on non-CUSMA-compliant goods imported from Canada.
2. De Minimis Elimination: The U.S. is suspending the de minimis exemption for low-value shipments.

Let’s look at each of these in detail.

1. Increased Tariffs on Non-CUSMA Goods

The U.S. is increasing the International Emergency Economic Powers Act (IEEPA) tariff on non-CUSMA-compliant goods from 25% to 35%, effective August 1, 2025.

What is CUSMA Compliance?

CUSMA is a free trade agreement between Canada, the U.S., and Mexico. To be “CUSMA-compliant,” goods must meet specific “rules of origin.” In short, this means that a sufficient amount of the product must be made or assembled in North America.

To prove that your goods are CUSMA-compliant and avoid the new tariffs, they must be accompanied by a CUSMA certification of origin. This is a document that includes nine key data elements, such as product description, country of origin, and Harmonized Tariff Schedule (HTSUS) code.

Key Tariffs You Need to Know

The 35% tariff isn’t the only one. Here is a quick overview of the tariffs currently affecting Canadian exports to the U.S.:

Note: Tariffs on Canadian lumber and dairy are still under consideration, along with semiconductors and pharmaceuticals.

Here’s how FlagShip can help you avoid the new tariffs:

Step 1 – Complete the UPS Document – Click here to access the document.

Step 2 – Simply email your USMCA/CUSMA documentation to us at: cusma_usmca@flagshipcompany.com

Once your document is received, the FlagShip team will promptly submit your document to UPS to ensure everything is correctly on file. Your document must be received as soon as possible to avoid tariffs and delays on your shipments to the U.S.

Not sure if your goods are CUSMA compliant?

We always encourage you consult with a customs broker. In addition, here are resources that may be helpful:

• The Government of Canada’s Trade Commissioner Service offers a clear and practical step-by-step guide on CUSMA compliance. This is an excellent resource for businesses that need to understand the requirements for their specific goods. Resource link here.
• For help finding a good’s HS code, you can use the Canada Tariff Finder.

2. The End of De Minimis Treatment

This is a major change for many shippers. Effective August 29, 2025, the U.S. is eliminating the de minimis exemption for low-value shipments.

What is De Minimis Treatment?

Previously, the U.S. had a de minimis threshold of $800 USD. This meant that shipments valued at $800 or less could enter the country duty- and tax-free, with minimal customs scrutiny. This exemption helped simplify cross-border shipping, especially for e-commerce and smaller businesses.

How is This Changing?

Now, all shipments to the U.S., regardless of their value, are subject to applicable duties and taxes. This applies to all goods shipped via non-postal networks (e.g., couriers like UPS). This change may lead to additional shipping costs and new clearance requirements for shipments that were previously exempt.

What This Means for You: Practical Steps

To avoid delays, unexpected fees, and frustrated customers, here are the immediate actions you should take:

1. Understand the New Brokerage Fees: New Brokerage Fees will be applied to all Ground/Standard shipments for preparation of entry with US Customs. Please see below:

a. Entry preparation fees:

-Shipments valued between $1 – $200 USD: $10 USD per shipment

-Shipments valued between $200 – $800 USD: $20 USD per shipment

b. Disbursement fee:

-2% of the duties and taxes advanced. The minimum fee is $14 USD. This is also known as the Bond Fee.

2. Provide a CUSMA Certification: To qualify for CUSMA benefits and avoid the new tariffs, you must provide a CUSMA certification of origin with your commercial invoice.

Action: Contact a trade advisor or a customs broker to help you assess your goods and create this document.

3. Complete Your Commercial Invoice Accurately: Your commercial invoice is more important than ever. Incomplete or inaccurate information can cause significant delays.

Action: Ensure your commercial invoice includes:

• Detailed product description
• Country of origin
• 10-digit Harmonized Tariff Schedule (HTSUS) code
• Quantity and value of items
• Recipient’s email and contact information

4. Be Prepared for New Fees: With the de minimis exemption gone, all shipments will now be subject to U.S. government duty fees.

Action: Consider using a Delivered Duty Paid (DDP) shipping method. This ensures that all duties and taxes are paid upfront, preventing delivery delays or customer refusal due to unexpected fees.

This is a complex and evolving situation, and we are working hard to stay on top of the latest information to help you navigate it successfully.

Remember: Proper documentation and an understanding of these new rules are the keys to a smooth shipping experience.

Important Disclaimer: This guide is for informational purposes only. It does not constitute legal or professional advice. Information herein was obtained from government, industry, and other public sources which are subject to change and have not been independently verified by FlagShip. Recipient has sole responsibility for determining the usability of any information provided herein. Before recipient acts on the information, recipient should seek professional advice regarding its applicability to the recipient’s specific circumstances.

Helpful Links and Resources

• Shipping from Canada to the US
• Step-by-step guide to exporting from Canada
• Items that cannot be shipped to the US

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