Rugs by Roo founder Sandy Wong surrounded by boxes in her Vancouver home. Ms. Wong has had to make several adjustments to her online home décor business amid recent trade uncertainty.Supplied
Entrepreneur Sandy Wong’s living room is stacked floor to ceiling with oversized boxes filled with children’s beanbag chairs shipped from Latvia and temporarily warehoused in her two-bedroom Vancouver apartment.
They arrive via Canada Post and it’s her job, as founder of the online non-toxic home décor retailer Rugs by Roo, to repackage and ship them to her U.S. customers.
“It’s bulky, not heavy, but bulky,” she says about the bean bag shipments taking up space in the 850-square-foot home she shares with her husband, three kids, dog and cat.
“Every day I’ve been getting shipments from Canada Post… and then I’ve had to find ways to ship it out [to the U.S.] and it’s not cheap.”
Across the country, entrepreneurs such as Ms. Wong are contending with an unpredictable trade environment. Tariffs and retaliatory measures, coupled with rising freight costs, have added strain to already thin margins.
Ms. Wong’s Latvian supplier used to ship products directly to her American customers, leaving her living room clutter-free. However, new rules prevent many Latvian companies from shipping to the U.S., meaning Ms. Wong has to reroute her products through Canada, which increases her shipping costs and workload.
“We’ve been trying to find couriers that will ship to the U.S. for us at the lowest price possible and we’re just bracing ourselves for the hit with tariffs, duties and brokerage fees,” she says.
Take, for example, a foldable chair she buys from Latvia for $420: Her company pays $232 to ship it to Canada, and another $343 to ship it to customers in the U.S., which means she pays more in shipping than she does for the chair, which retails for US$1,139 (or about $1,560).
In another example, the U.S. recently imposed a 50-per-cent tariff on the made-in -India rugs she designs under her own brand, Tuft Love. Ms. Wong ships the rugs from Canada but still pays the tariff when selling them to U.S. customers because the product was manufactured in India. And because these rugs sit at a higher price point — roughly $3,000 each — Rugs by Roo has been absorbing the cost increase rather than passing it on to customers.
The compounding effect of trade wars
Entrepreneurs across Canada are contending with the ripple effects of the Trump administration’s tariffs, which are also weighing on overall economic growth, says Pierre Cléroux, vice-president of research and chief economist at the Business Development Bank of Canada (BDC).
“People are worried – and that slows down part of the economy,” he says.
Sudden policy swings are compounding the strain. Even small changes to cross-border parcel thresholds – the so-called ‘de minimis’ rules – can have outsized effects on small importers, says Karl Littler, senior vice-president, public affairs at the Retail Council of Canada in Toronto.
The de minimis rule allows low-value imports to enter the U.S. duty-free. In 2015, the threshold rose to $800, but as of August this year, many shipments no longer qualify, adding costs and paperwork for e-commerce firms and likely raising prices for consumers.
“If a parcel enters Canada under the de minimis limit…the Canadian merchant down the street has to charge tax and duty. That is the competitive problem,” Mr. Littler says.
The recent reduction of the U.S. de minimis threshold has removed a key advantage for Canadian micro-exporters, says Keith Head, a professor at the University of British Columbia’s Sauder School of Business in Vancouver.
“For small businesses, that is a big deal,” Prof. Head says. “They now pay full tariffs even on small shipments, and uncertainty about future U.S. trade policy makes planning almost impossible.”
Entrepreneurs remain resilient amid trade challenges
Still, Mr. Cléroux says Canadian entrepreneurs are showing resilience through these latest challenges.
About three-quarters of entrepreneurs surveyed in the BDC State of Entrepreneurship Report 2025 say they’re adapting to the new economy reality by investing in technology, reviewing costs and diversifying their markets.
“They are squeezed, but they are reacting to protect profitability,” Mr. Cléroux says. “That’s how Canada can stay competitive in the long term.”
Ms. Wong has made her share of adjustments. She now runs the business on her own after having a staff of six a year ago. She has started using an artificial intelligence (AI) customer service platform to help her triage a deluge of customer inquiries, including shipment delays. The AI system handles about a third of inquiries automatically, sending updates to help calm frustrated customers.
“It’s been a lifesaver. I couldn’t keep up otherwise,” Ms. Wong says of the technology.
Amid the challenges, Ms. Wong says her company remains optimistic and committed to its founding principles of sustainability and transparency.
“Our vetting process hasn’t changed. If a supplier can’t show ethical standards or certifications, we don’t take them on. What we carry is just more expensive now,” she says. “There’s always a way to adapt. You just have to get creative, even if that means living with a mountain of beanbags in your living room.”