An illustrator from Sudbury, Ont., is stopping all shipments to the United States because his artwork will no longer fall under a trade exemption that protected him from tariffs.
In July, President Donald Trump signed an executive order to remove the “de minimis” duty-free treatment on parcels under $800 from all countries, starting this Friday.
For Mark Gagné, that means his U.S. customers would have to pay a 35 per cent tariff on his art.
“I’m not big enough to sort of absorb that cost on my end,” he said. “It’s kind of been a decision made for me that I’m going to have to halt shipments to the U.S. until something’s worked out.”
Gagné said 90 per cent of his online sales are to the U.S. But a 35 per cent tariff makes his artwork uncompetitive.
To compensate for the loss in business, he said, he’ll need to explore other options, such as letting his U.S. customers purchase digital versions of his artwork, which they can print at home.
Gagné said his in-person sales have also been growing recently.
“Thankfully I have, you know, some fairly decent sales like at the local market and stuff, and sales have increased a bit over the last year or so in Canada,” he said.
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Gagné said he’s spoken to other artists who are in similar situations. His customers are also frustrated with the end of tariff exemptions for shipments under $800.
“Most people are not happy with the decision,” he said.
“I have a lot of customers in the U.S. that like to order fairly regularly and they understand my decision, like, they don’t blame me at all. And they’re upset with the administration down there and just the decisions that they’ve been making.”
Michelle Auger, a senior policy analyst with the Canadian Federation of Independent Business (CFIB), said one-third of small and medium businesses will be affected by the loss of the “de minimis” exemption in the U.S.
The Canadian Federation of Independent Business says small businesses can avoid tariffs on their deliveries to the U.S. if they can complete the paperwork for Canada-United States-Mexico Agreement compliance. (Michael Wilson/CBC)
But Auger said goods that are compliant with the Canada-United States-Mexico Agreement (CUSMA) can still cross the border tariff free.
Determining if goods comply with CUSMA, and completing the required paperwork, usually means working with a customs broker.
“The actual paperwork, once you’ve gone through the steps of figuring out if you’ve met that requirement, it’s not that burdensome,” Auger said.
“And there are lots of resources out there that kind of break it down.”
But Auger said the country of origin rules to comply with CUSMA can be complicated.
She brought up the example of a Canadian hockey stick manufacturer who imports materials from other countries.
“The transformation is not substantial enough to meet the CUSMA compliance,” Auger said.