President Trump’s Tariffs on Canada and E-commerce

U.S. President Donald Trump has announced plans to impose tariffs on goods imported from Canada to the United States. These tariffs will have significant implications for cross-border trade and e-commerce. Here’s what we know so far.

Update February 11, 2025

Great news! The shipments received on February 3 and 4 that were refused at the border due to the aforementioned changes have largely cleared. The majority successfully crossed over during the weekend and on Monday, February 10. The remaining backlog will be sent out today, Tuesday, Feburary 11. Any other shipments held after the 3rd and 4th are expected to clear by end of day Wednesday, February 12.

Please note that Country of Origin and, if applicable, the HTS code will remain mandatory for all U.S. and international shipments. Thank you for your patience and understanding.

Resources:

• Referring to sources provided by government authorities
  • Marking of Country of Origin on U.S. Imports
  • Determining Origin: Substantial Transformation
• Consulting with CBP directly

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Update Feb 7, 6:45pm ET/3:45pm PST 

We have successfully moved shipments across the border containing goods of China/Hong Kong origin. We will accept China/Hong Kong origin shipments again and will work to immediately move the existing shipments received this past week. 

The update to the Presidential Action re-instates Section 321 with the de minimis threshold for goods originating from China and Hong Kong, meaning goods valued under $800 USD won’t be subject to tariffs. However there is no firm date as to how long this grace period will last and things could change at a moment’s notice. 

Please continue to monitor our blog as we’ve seen quick changes and updates over the last few days. 

For shipments that are China/Hong Kong origin the following will still be mandatory: 

• Country of origin
• HTS 10 digit code 

For all other shipments that are non China/Hong Kong origin, country of origin will be mandatory. Missing COO and 10-digit HTS codes will result in further delays.

We’ve also introduced a new postage option Tracked Packet – USA to put your concerns about duties to rest. Learn all about it here.

Our teams are working around the clock to get shipments from Feb 3rd and 4th moving and we welcome you to monitor your tracking as shipments will begin showing updates shortly.

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Update: February 7, 2025

We appreciate the patience and understanding of all our clients as we understand it’s been a lot of information and changes to your U.S. bound shipment workflow. Our team is committed to providing updates as best we can given the fluid nature of the situation. 

While we’ve had successful border crossings since Feb 4 for non China/Hong Kong shipments, there may still be delays with inspections. We’ve added alerts on our tracking pages so that your customers are aware that delays are occurring. 

For those shipments that are currently held at our branches from Feb 3 & 4, our team is working through this backlog. We do not have a firm ETA on when these shipments will cross the border, but will provide updates here. We are grateful for your patience as our team prioritizes getting these shipments processed. If you haven’t done so already please make sure to update the country of origin as this is a mandatory requirement. 

Country of Origin & HTS Codes

There is now a new Country of Origin (COO) support article & article about the 10 digit HTS Codes. These articles will continue to be updated as we gain clarity from CBP, our partners and customs broker. 

Here are a few key reminders:

• While proof of COO is not required at this time, it is possible that this can be requested while crossing the border, so we advise to provide as much supporting documentation to support the country of origin to minimize delays. Ideally you can include this to the outside of your package. 

• There is a difference between HS and HTS codes. While they do share the first six digits, they are not interchangeable. If you enter only an HS code when an HTS code is required it could result in incorrect duties, customs delays, or compliance issues. The same goes for declaring the Country of Origin correctly as failure to do so can lead to customs and border fees of up to $50,000 USD.
  • HTS Codes are 10 digits and mandatory for shipments with origin China/Hong Kong
  • HS codes are mandatory for:
    • Overseas military addresses (APO/DPO/FPO)
    • U.S. territories (e.g. Guam, Puerto Rico, etc.) and
    • USPS International postage

Need to find an HTS code? 

• Find a Harmonized Tariff Schedule Code
• Canada Tariff Finder

For your U.S. bound shipments with origin China/Hong Kong – you can now use Canada Post Tracked Packet USA. This postage is considered DDU (Delivery Duties Unpaid) and will charge any applicable customs duties and fees to the recipient at the time of delivery. Country of origin and the 10 digit HTS code is mandatory. 

Read all about the features in this blog post.

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Update: February 5, 2025

Recent developments regarding tariffs have introduced new requirements for shipments. Below is a summary of what has happened, what actions have been taken, and what you need to know moving forward.

What has happened?

As a result of new Presidential Actions targeting products from the People’s Republic of China (PRC), additional shipment information is now required. This applies to:

• Shipments purchased before February 4, 2025, but not yet crossed the border.
• Any future shipments containing products originating from China or Hong Kong.

Previously, shipments entering the U.S.-Canada border under Section 321 of the Tariff Act of 1930 (de minimis) could enter duty-free if valued under $800 USD. However, under the new tariff regulations introduced by President Donald Trump, shipments from China and Hong Kong are no longer eligible for this exemption.

These changes were implemented abruptly, and various agencies were unprepared to handle them. As a result, shipments sent out on February 4, 2025, experienced delays. The U.S. Customs and Border Protection (CBP) now requires additional information for shipments crossing the border.

In response to the recent U.S. border requirements, Chit Chats will now require additional information for all U.S. bound and international shipments. The Country of Origin (where the product was made) will be required. Be advised that this will become an industry-wide change.

It is important to declare the Country of Origin correctly for your shipments as this can lead to customs and border fees of up to $50,000 USD.

Shipments with products that originate from China and Hong Kong

• Shipments purchased and dropped off before February 4, 2025, but have yet crossed the border will continue to be held until a solution is available to pay for duties and fees.
• For any future shipments originating from China or Hong Kong:
  • We ask you to hold onto these and refrain from dropping off until a solution is in place.
  • Duties will be required to be paid on these types of shipments (can range between 10-35%) and either paid by seller or buyer.

Please note that shipments originating from China or Hong Kong will also require an HTS code in addition to the Country of Origin as this is how the duty rates are calculated. Harmonized Tariff Schedule (HTS) Codes are used to identify the goods within your package with a numerical system and will be a 10 digit code.

Need to find an HTS code? Reference Find a Harmonized Tariff Schedule Code.

Shipments with products that do not originate from China and Hong Kong

• Shipments purchased and dropped off before February 4 2025, but have yet crossed the border
  • Currently held, you will be required to update the shipment information with the Country of Origin.
  • These shipments will experience delays while we wait for confirmation that the Country of Origin has been added to the shipments.
  • In order to add this information, go to your “In Transit” shipments, click on the applicable shipments and click the button “Edit Shipment Items.” Note: this feature is temporary and only applies to shipments dropped off February 7 or earlier. You can also follow the tutorial below:

• Any future shipments that have the Country of Origin included and received by Chit Chats will be sent to border as normal, pending delays at the border.
  • We hope to cross the border successfully, but there may be possible delays due to inspections. 

With these changes, if you import to the Chit Chats platform using API: 

• We will enforce shipment items for all US bound shipments
• Country of Origin will be mandatory for each shipment item
• The 10 digit HTS codes will be mandatory for each shipment item with Country of Origin being China or Hong Kong.

FAQ

Q: What if I hand make an item and one of the components is from China, but the actual completed product is made in Canada?

A: If more than 51% of the materials and labour was done in Canada, then the product can be considered to be made in Canada. 

Q: How are taxes and duties calculated?

A: Fees are calculated based on the retail value of the shipment as well as the HTS code. 

Q: Does this change apply to lettermail as well?

A: Yes, the same rules of COO and HTS codes (if from China and Hong Kong) apply for lettermail.

Q: How do I provide proof?

A: Most products have the country of where it was made directly on the product (i.e. Made in China/U.K., etc). In addition, you can also provide a commercial invoice or a manufacturer documentation that indicates the Country of Origin. If you sell collectibles or other products, it is your responsibility to find out the country of origin for the product and provide the necessary documentation. Note: Incorrectly declaring your Country of Origin can lead to fines of $50,000 USD at the border. 

Q: What if I don’t know the country of origin? 

A: You will be unable to ship until you are able to find the Country of Origin of the product. 

Q: Who is the importer? 

A: You (the seller/merchant) are the importer. Chit Chats only provides transport and postage solutions for you. DDP and DDU options differ in who pays for the applicable duties and taxes. DDP (Delivery Duties Paid) will require the seller (you) to pay for the taxes before shipping; meanwhile, DDU (Delivery Duties Unpaid) will require the recipient (the customer) to pay.

An example of DDU in Canada is when you order something from Japan and the value is over $20 CAD; Canada Post will require you to pay the customs and duties fees when picking up the package. 

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Update: February 4, 2025

While U.S. tariffs on Canadian goods have been postponed for 30 days, a 10-30% tariff has been implemented on goods originating from China including Hong Kong. This means that if your product is originally from China or Hong Kong, your shipment will be subject to this tariff.

As a result, our February 4 border crossing was disrupted, and we are actively investigating the situation. If your shipments were affected, please keep an eye on your email and Chit Chats account as our team will be in touch directly on the next steps.

What This Means For Your Shipments

• The country of origin will be required for all U.S. shipments and our team is working to include this mandatory field during shipment creation.
• Goods originating from China including Hong Kong will be subject to tariffs and duties, if you have products that fall in this category you may want to consider reviewing your costs and pricing for these products

What’s Next?

• Please be ready to share Country of Origin information for your items.
• Expect delays for U.S.-bound and international shipments as we seek confirmation on how to proceed under these new restrictions introduced by President Donald Trump.
• For products that originate from China/Hong Kong our Development team is actively working on solutions that include both DDP (Seller pays duties and taxes) and DDU (Buyer pays duties and taxes) options.

As this situation is fluid we will continue to provide updates and appreciate your patience while we navigate through this together.

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Update: February 3, 2025

Talks of new tariffs on goods imported from Canada to the U.S. have sparked concerns, particularly within the e-commerce and trade communities. U.S. President Donald Trump signed an executive order on February 1st that will impose a 25% tariff on Canadian imports starting February 4th, but both sides have agreed upon a 30-day reprieve. As the United States is Canada’s largest trading partner, this development will have significant economic repercussions, especially for Canadian businesses reliant on cross-border trade.

Rest assured, Chit Chats is working relentlessly to find alternatives to support your business regardless of the outcome of this 30 day reprieve.  

Now, let’s unpack the implications of these proposed tariffs:

What does this mean for you?

With the recent developments from the talks held between President Trump and Prime Minister Justin Trudeau, here is what you need to know:

• U.S. bound and international shipments dropped off on Monday, February 3rd will cross the border as expected and will continue to do so for the next 30 days.
• The proposed tariffs will affect all goods imported into the United States. 
• If after the 30 day period tariffs are imposed, there may be additional requirements for collecting Harmonized Tariff Schedule (HTS) codes and the Country of Origin (COO); you should familiarize yourself with the system by using the Code lookup tool.
  • If this is required, you can save time by taking advantage of our item preset feature to easily add HTS Codes and COO to your shipment items. If you import your shipments with a store integration, most platforms allow you to add this information directly to your product listings for a seamless experience.
• Regarding collecting tax and duties for U.S. bound shipments, more details will be provided as they emerge.

If there are disruptions to our U.S. bound service, any shipments in the Chit Chats network will be held until further notice. If you wish to have these returned to you, please reach out to your local branch to request this.

Given the dynamic nature of these developments, we strongly encourage you to stay informed. Bookmark this page and check back periodically for updates, as we will provide the latest information to help you adapt to any potential changes. Rest assured that Chit Chats is closely monitoring the situation and is committed to keeping you informed every step of the way.

What are tariffs?

Tariffs are taxes imposed on imported goods, often used to protect domestic industries or generate government revenue. When these taxes are applied, businesses that rely on imports typically pass the added cost to consumers by increasing prices. For Canadian goods subject to a 25% tariff, the result would be higher prices for American consumers if the business decides to pass the cost onto the consumer and ultimately fewer purchasing options for them. This price disparity could incentivize U.S. consumers to favor American-made products, effectively reducing demand for Canadian goods in the U.S. market.

Experts warn that the proposed tariffs could significantly harm the Canadian economy, potentially removing billions of dollars from Canada’s GDP.

What has happened so far?

What has the Canadian Government said?

The Canadian government is actively strategizing its response to the 25% tariff on goods imported into the United States. Prime Minister Justin Trudeau has announced retaliatory 25% tariffs on $30 billion worth of American goods, including beer, wine and spirits, vegetables, clothing, shoes and perfume.

The tariffs will then be applied to $125 billion worth of American imports in three weeks’ time.

More extreme measures have also been discussed, such as “several” non-tariff measures related to energy and minerals, but those steps would be further developed in co-ordination with the provinces and territories.