Trump's tariffs could make sending a package or crossing the border costlier — and more complicated

It could get more complicated — and potentially more expensive — for Canadians to cross the border or send packages to the United States, if President Donald Trump's executive order on tariffs goes into effect.

Businesses that export products to the U.S. have warned that Trump's plan for 25 per cent tariffs on most Canadian goods could lead to losses and layoffs. But it is the small print in the order and the way the U.S. government is instructed to implement it that could hit individual Canadians.

The executive order that Trump signed on Saturday didn't just levy tariffs on Canadian goods. He also removed what is called the de minimis customs exemption. That little-known exemption allows people to bring or ship up to $800 US worth of goods per recipient per day into the U.S. without having to pay duty on those goods.

The U.S.'s de minimis provision has been invaluable to many people and companies around the world, easing travel and trade. U.S. Customs and Border Protection estimates that $54.5 billion worth of goods entered the U.S. in 2023 using the exemption.

It has also made it a bit easier to cross the border since Canadians and Americans returning to the U.S. don't have to make a formal declaration or pay duty unless they are bringing in goods worth more than $800 US. And its removal for imports from China could also impact Canadian businesses.

According to the U.S. Bureau of Transportation Statistics, 20.6 million personal vehicles entered the United States in 2023, plus nearly 216,000 pedestrians. Added to that would be those who entered by air or sea.

Andrea Bjorklund, a McGill University professor and an expert in international commercial law, said eliminating the de minimis exemption could hit a lot of Canadians, particularly those who live near the border and go back and forth a lot.

"I think it is very likely to make trips much more cumbersome because if the order is implemented, literally it seems that anyone crossing the border has to make a declaration about what they're carrying and potentially to pay duty on it without any de minimis exception," said Bjorklund.

"At the very least, it is going to slow things down a great deal."

A last-minute deal Monday paused the implementation of Trump's executive order until March 4. U.S. Customs and Border Protection (CBP) said it issued guidance based on that order to its officers on Monday, but that guidance was retracted on Tuesday.

Details of how the order would be implemented was also removed from the public inspection portion of the U.S. government's Federal Register on Tuesday.

Those documents shed light on just what could change for Canadians should Trump go ahead with his order.

For those crossing the border into the U.S., the $800 de minimis exemption would be gone but the Federal Register notice provided an exception for "products for personal use" packed in the traveller's baggage.

"It means that you really are, I think, subject to the discretion of the individual officer about what they think personal use is," said Bjorklund, pointing out that a Canadian-made gift for a family member in the U.S. might not be considered something for your own personal use.

There would also be changes for Canadians and Canadian businesses shipping parcels to the U.S. 

Beyond the elimination of the de minimis exemption, the notice in the Federal Register says all mail shipments from Canada would be subject to "formal entry" provisions.

"Without regard to their value, no mail shipments from Canada will be cleared or released by CBP unless and until formal entry is properly filed," reads the notice.

U.S. agency says narcotics being shipped under exemption

In 2024, the CBP warned that bad actors were using the de minimis exemption to ship narcotics and things like precursor chemicals to make fentanyl by international mail and courier services. 

Jesse Mitchell, director of business development for customs broker Strader-Ferris International, says requiring all mail shipments from Canada to go through formal entry would mean cumbersome customs declarations would be required for shipments of Canadian goods to the U.S. in addition to the proposed 25 per cent tariff.

Mitchell said that would be a "massive" administrative burden.

"How is U.S. customs going to manage all this?" he said.

Mitchell said the problems are already starting — while Trump has paused his executive orders on Canada and Mexico, the executive order imposing tariffs on China went into effect Tuesday. Like the Canadian order, Trump's order on China eliminates the de minimis exemption — used by popular discount "direct from China" discount retailers, among others.

A Canadian or a Canadian business shipping something made in China to the U.S. could have to pay duty on the value of those goods — even if they are worth less than $800 US and the order targeting Canadian goods is not yet in effect.

"Canadian companies that are distributors or that ship parts to the United States or things to the U.S., and they're often shipping FedEx or UPS across the border, those items that are Chinese will now be fully dutiable and will have tariffs on them," said Mitchell.

While a de minimis customs clearance is relatively simple and includes few questions, a formal customs clearance requires a lot more work, he added.

That will add to the cost, he said.

For example, Mitchell said a Chinese-made shirt worth $100 when it crosses the border will now face a 25 per cent tariff plus a 10 per cent new tariff — plus the original customs duty on the shirt of about 17 per cent.

"If that order had shipped five days ago, or even two days ago from Canada and it was a $100 shirt, it would have had zero duty," he said.