How Canadian E-commerce Companies Can Navigate New US Shipping Duties
Published: September 8, 2025 | Reading time: 5 mins
If your Canadian e-commerce business ships products to US customers, August 29, 2025, marked a significant turning point for your operations. The Trump Administration's elimination of the de minimis exemption means that every package you send across the border—no matter how small—now faces customs duties that can reach up to $200 per shipment.
For many Canadian online sellers, this policy change represents a major challenge to their US market expansion. But with the right fulfillment strategy, you can minimize the impact on your customers and maintain competitive pricing.
What Changed and Why It Matters
For decades, the de minimis exemption allowed packages valued under $800 USD to enter the United States duty-free with minimal paperwork. This made cross-border e-commerce simple and cost-effective for Canadian businesses selling to American customers.
That exemption is now gone.
The Immediate Impact:
- Every shipment from Canada to the US now faces customs duties
- Duties can range from 25-30% of the shipment value, with potential charges up to $200 per package
- Additional customs paperwork and processing delays
- Significantly higher shipping costs that must be absorbed or passed to customers
The Real Cost to Your Business
To understand the potential impact, here’s how these new duties can play out at checkout for your customers:
Small Item Seller (Average Order Value: $50)
- Previous cost: $0 duty + standard shipping
- New cost: estimated $15–25 duty + standard shipping + possible customs delays
- Total impact: customer pays 30–50% more for the same order
Mid-Range Product Seller (Average Order Value: $200)
- Previous cost: $0 duty + standard shipping
- New cost: estimated $50–60 duty + standard shipping + possible customs delays
- Total impact: customer pays 25–30% more for the same order
These scenarios illustrate how even modest purchases can become significantly more expensive once duties are factored in. While the exact amounts will vary depending on product type, order value, and carrier practices, the direction is clear: additional costs and delays can quickly make Canadian products less competitive in the U.S. market.
Why Traditional Solutions Fall Short
Raising Prices: Passing duties to customers at checkout often results in abandoned carts and lost sales, especially for lower-value items where the duty represents a large percentage of the purchase price.
Absorbing Costs: Taking on $15-200 in duties per order quickly erodes profit margins to unsustainable levels.
Focusing Only on Canada: Limiting yourself to the Canadian market means missing out on the world's largest e-commerce market, which is 10 times the size of Canada's.
The Dual-Country Fulfillment Solution
The most effective way to optimize your duty costs and improve the customer experience is to shift from individual cross-border shipments to bulk imports with US-based fulfillment. Instead of shipping individual orders from Canada to the US, you store inventory in both countries and ship domestically within each market.
How it Works:
- Canadian orders: Ship from Canadian warehouses (business as usual)
- US orders: Ship from US warehouses (domestic shipping only)
- Bulk imports: Import inventory from Canada to US warehouses in consolidated shipments
The Key Advantages:
- Better duty economics: Pay duties once on bulk shipments at wholesale/production costs rather than on each individual retail order
- No surprise charges for customers: Duties are paid upfront as part of your cost of goods, not passed to customers at checkout
- Faster delivery: Domestic US shipping is faster and more reliable than cross-border shipping
- Improved conversion rates: Customers see transparent, predictable pricing without unexpected duty charges
Important note: You still pay customs duties when importing inventory into the US—there's no way to avoid them entirely. However, this approach transforms duties from a recurring per-order cost that disrupts the customer experience into a predictable business expense that you can manage through bulk importing and strategic pricing.
Why Ziing's Cross-Border Fulfillment Makes Sense
At Ziing Fulfillment, we specialize in exactly this type of cross-border challenge. Our network operates fulfillment centers in both Canada and the United States, allowing your business to serve customers in both markets while optimizing your duty costs and delivery experience.
Our end-to-end solution includes:
- Warehousing & Storage: Secure storage for your inventory in both Canadian and US facilities
- Pick and Pack Fulfillment: Professional order processing and packaging
- Automated Order Processing: Seamless integration with your e-commerce platform
- Customs Brokerage: Expert handling of bulk imports and customs compliance
- Inventory Management: Real-time tracking across both locations
- E-commerce Integrations: Direct connectivity with Shopify, Amazon, and other platforms
The competitive advantage: Most fulfillment companies operate in only one country. Our dual-country network means you can offer your customers fast, predictable delivery with transparent pricing—no surprise duty charges at checkout.
Real-World Success Example
Consider a Canadian company selling $100 artisanal products to US customers:
Old Model (Individual Cross-Border Shipping):
- Product: $100
- Shipping: $15
- Duty: $25-30
- Total Customer Cost: $140-145
New Model (US Fulfillment with Bulk Import):
- Product: $100 (duty costs absorbed in wholesale pricing)
- Domestic US Shipping: $8-12
- Duty: $0
- Total Customer Cost: $108-112
The customer saves over $30 per order while you maintain competitive pricing. You still pay duties on the bulk import, but by optimizing when and how you pay them, you create a better customer experience and more predictable costs for your business.
Getting Started: Next Steps for Your Business
- Assess Your US Market Impact: Calculate how much of your revenue comes from US customers and what the new duty structure means for your business model.
- Evaluate Inventory Distribution: Determine which products make sense for US warehousing based on demand patterns, inventory turnover, and duty rates.
- Choose the Right Fulfillment Partner: Look for a provider with proven cross-border expertise, customs brokerage capabilities, technology integrations, and facilities in both countries.
- Plan Your Bulk Import Strategy: Work with customs experts to optimize your duty costs through proper classification, valuation, and import timing.
The Window of Opportunity
While this policy change creates challenges for many Canadian e-commerce businesses, it also creates a significant competitive advantage for those who adapt quickly. Companies that optimize their fulfillment strategy early will capture market share from competitors who are still struggling with per-order duty charges and poor customer experiences.
The businesses that act decisively now—while their competitors are still figuring out their response—will be best positioned to thrive in this new trade environment.
Ready to Optimize Your Cross-Border Strategy?
Ziing Fulfillment helps Canadian e-commerce companies serve their US customers with transparent pricing, fast delivery, and optimized duty costs. Our dual-country fulfillment network turns the new trade barriers into your competitive advantage.
Explore How This Applies to Your Business
Contact fulfillment expert, Bruno Steppuhn, bsteppuhn@ziing.com, or visit ziing.com/fulfillment to discover how we're helping Canadian businesses maintain their US growth trajectory.
Don't let new trade policies derail your American expansion. With the right fulfillment strategy, you can serve US customers better than ever—with predictable costs and superior delivery experiences.
