For years, the United States was the natural first export market for Ontario online businesses. It's close, speaks the same language, and has roughly nine times Canada's population. Many small Ontario brands built significant revenue by shipping directly to American customers, often with minimal paperwork.
That landscape has changed dramatically. Since August 2025, low-value parcels from Canada no longer enter the U.S. duty-free, and the tariff environment through 2026 has been volatile. This doesn't mean Ontario businesses should abandon U.S. customers, but it does mean cross-border selling now requires more planning, better data, and a clear understanding of costs.
This article explains the current environment in plain language and how to use Shopify's tools to sell to the U.S. more effectively. Because trade policy is changing quickly, treat everything here as a starting point and confirm details with a customs broker or trade advisor before making decisions.
What changed: the end of de minimis
The U.S. previously allowed shipments valued at US$800 or less to enter duty-free with minimal formalities under a provision commonly called "de minimis" (Section 321). For Canadian ecommerce sellers, this was enormously helpful: a $60 sweater could ship to a customer in Michigan without duties or complex customs entries.
As of August 29, 2025, the U.S. suspended duty-free de minimis treatment for shipments from all countries, including Canada. Now:
- Low-value commercial shipments require customs entry and may be subject to duties.
- Carriers often charge brokerage or customs processing fees, which can be significant relative to a small order.
- Postal shipments to the U.S. require duties to be assessed and prepaid before crossing the border.
U.S. legislation passed in 2025 also set a permanent repeal of de minimis for commercial shipments, effective in July 2027, so merchants should treat this as a lasting structural change rather than a temporary disruption.
The CUSMA factor
The Canada-United States-Mexico Agreement (CUSMA, known in the U.S. as USMCA) is central to cross-border selling. Goods that meet CUSMA's rules of origin can often enter the U.S. with preferential (often duty-free) treatment, even without de minimis. However:
- Meeting the rules of origin isn't automatic. Whether a product qualifies depends on where its materials came from and how it was made. A product assembled in Ontario from imported components may or may not qualify.
- Preferential treatment must be claimed, typically supported by a certification of origin.
- Some tariffs apply even to CUSMA-compliant goods. Throughout 2025 and 2026, the U.S. imposed sector-specific tariffs, and in mid-2026 introduced tariffs on a range of Canadian products that do not exempt CUSMA-compliant goods.
- CUSMA's future is under review. The agreement's formal joint review began in 2026, and the U.S. did not agree to a straightforward 16-year extension, which means ongoing uncertainty.
The practical takeaway: know your products' origin and classification, and work with a customs broker who understands ecommerce.
Understanding the costs of a cross-border order
A cross-border order can now include:
- Product price
- Shipping cost
- Duties and tariffs (if applicable)
- Brokerage or customs processing fees
- U.S. state sales tax (depending on your obligations)
- Currency conversion costs
The biggest customer experience problem is surprise costs at delivery. If a U.S. customer is asked to pay duties and fees when a parcel arrives, they may refuse it, leaving you with return shipping costs and a lost sale. They're also unlikely to buy again.
DDP vs. DDU
- DDU/DAP (Delivered Duty Unpaid/Delivered at Place): The customer pays duties and fees on delivery. Simpler for you, often worse for customers.
- DDP (Delivered Duty Paid): You collect duties and taxes at checkout and pay them on the customer's behalf. The customer pays one transparent price.
For most direct-to-consumer merchants, DDP provides a much better customer experience, and it has become an expectation in many markets.
Key data you need
Cross-border selling depends on accurate product data. For each product, you'll need:
- HS code (Harmonized System code): A standardized classification that determines duty rates. Shopify lets you add HS codes to products.
- Country of origin: Where the product was made, which is not necessarily where it ships from.
- Accurate description: "Women's knit cotton sweater," not "clothing" or "gift."
- Accurate value: Never undervalue shipments. Penalties can be significant, and U.S. rules include penalties for splitting orders or misstating values to avoid duties.
- Weight and dimensions.
If you don't know your HS codes or origin status, start there. A customs broker can help classify products and advise on CUSMA eligibility.
Using Shopify to sell to the U.S.
Shopify Markets
Shopify Markets lets you create a dedicated U.S. market with:
- Local currency pricing in U.S. dollars
- Price adjustments or fixed prices for U.S. customers
- Market-specific product availability (for example, excluding products that are expensive to export or restricted)
- Market-specific domains or subfolders (such as yourstore.com/en-us)
- Duties and import tax collection at checkout, where supported
Check how many markets your plan includes and whether duty collection is available for your setup.
Collecting duties at checkout
Shopify offers tools to estimate and collect duties and import taxes at checkout for supported carriers and plans. When enabled, customers see landed costs upfront. Accurate HS codes and countries of origin are essential for this to work.
Some merchants use Shopify's managed international selling options or third-party cross-border platforms that act as merchant of record, handling duties, taxes, and compliance. Evaluate availability, fees, and how much control you give up.
Pricing strategy
Options for U.S. pricing:
- Absorb some costs to keep prices competitive, reducing margin.
- Raise U.S. prices to reflect higher landed costs.
- Offer free shipping above a higher threshold for U.S. orders.
- Restrict low-value orders where fees make them unprofitable, for example, by setting a U.S. minimum order value.
Use round, market-appropriate price points in USD rather than direct conversions like US$43.17.
Shipping strategies
Courier vs. postal
Couriers often provide smoother customs clearance and clearer handling of CUSMA claims. Postal shipments can be cheaper for light items but may involve different processes and fees. Compare total landed cost and delivery reliability, not just base rates.
Cross-border shipping services
Several Canadian companies specialize in cross-border ecommerce, consolidating parcels and managing customs entries. For small businesses, these services can reduce per-parcel costs and paperwork.
U.S. fulfilment
Brands with significant U.S. sales sometimes store inventory in a U.S. warehouse or 3PL. Goods are imported in bulk (one customs entry for many units) and shipped domestically to customers. This can reduce per-order costs and improve delivery speed, but it requires upfront investment, more complex tax obligations, and careful planning. Get professional advice before taking this step.
U.S. sales tax
The U.S. doesn't have a national sales tax. Instead, states set their own rules. Many states require out-of-state sellers to collect sales tax once they exceed "economic nexus" thresholds based on sales volume or transaction counts in that state. Thresholds vary by state.
For most small Ontario sellers, U.S. sales volume in any single state may be below these thresholds, but you should monitor it. Shopify provides tools to track sales by state. If you store inventory in a U.S. warehouse, you may create physical nexus in that state, triggering obligations regardless of volume.
Returns from U.S. customers
Cross-border returns are expensive. Options include:
- Returnless refunds for low-value items, where return shipping would cost more than the product.
- U.S. return addresses through a returns consolidator.
- Clear return policies specific to international orders.
- Duty drawback for returned goods where applicable; ask your broker.
Should you still sell to the U.S.?
For many Ontario businesses, the answer is still yes, but more selectively. Questions to consider:
- Which products are profitable after landed costs? Higher-value, lightweight, CUSMA-qualifying products usually work best.
- What share of your revenue comes from U.S. customers? If it's small, simplifying (or pausing) may make sense. If it's large, investing in better processes or U.S. fulfilment may be worthwhile.
- Do your products have a unique selling point? Distinctive Canadian products, specialty goods, or strong brands can command prices that absorb added costs.
- Are there other markets worth exploring? Canada has trade agreements with the European Union (CETA), the UK, and Pacific markets (CPTPP) that may offer opportunities. Federal programs such as the Trade Commissioner Service and CanExport can help businesses research and enter new markets.
- Could you grow more in Canada? Many Ontario businesses have found untapped domestic opportunities, including in other provinces.
Staying informed
Trade policy in 2026 has changed repeatedly, sometimes with only days' notice. Build habits to stay informed:
- Subscribe to updates from the Trade Commissioner Service and Export Development Canada (EDC).
- Follow the Canadian Federation of Independent Business (CFIB), which publishes small-business-focused trade resources.
- Maintain a relationship with a customs broker.
- Review your U.S. pricing and landed costs quarterly, or more often during periods of change.
- Be aware that Canada's own counter-tariffs on U.S. goods can affect your import costs if you source products or materials from the U.S.
A cross-border readiness checklist
- [ ] Every product has an HS code and country of origin in Shopify.
- [ ] I know which products may qualify for CUSMA treatment, with documentation.
- [ ] I have a U.S. market configured in Shopify Markets with USD pricing.
- [ ] Customers see duties and taxes at checkout (DDP), where possible.
- [ ] I've compared courier, postal, and cross-border shipping services.
- [ ] I've set U.S. minimum order values or thresholds where needed.
- [ ] I'm tracking U.S. sales by state for sales tax purposes.
- [ ] I have a cross-border returns policy.
- [ ] I have a customs broker or trade advisor.
- [ ] I review trade updates regularly.
Key takeaways
- The U.S. ended duty-free de minimis treatment for Canadian shipments in August 2025, and the change is being made permanent.
- CUSMA can still provide preferential treatment for qualifying goods, but not all tariffs exempt CUSMA-compliant products, and the agreement itself is under review.
- Accurate HS codes, country of origin, and product descriptions are essential.
- Collecting duties at checkout (DDP) protects the customer experience.
- Evaluate U.S. selling product by product, and consider other export markets and domestic growth as part of your strategy.
Trade rules changed repeatedly throughout 2026. This article reflects information available in September 2026 and is not legal or customs advice. Consult a licensed customs broker, trade lawyer, or the Trade Commissioner Service for current guidance.