President Trump’s Tariffs on Canada and E-commerce

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. 

We understand with all the changes that have happened in the past few months, it is challenging to keep up while also focusing on selling. We are here to support you and your business as best we can. Here are some guidelines to help you.

Key Points

It is currently business as usual until the court hearings have concluded and until there is an announcement from the administration. 

Objects without Country of Origin markings are non-compliant for Section 321 (USPS-based services for nontariffed shipments)

Country of Origin marking is mandatory for ALL your products. It must be attached to the item itself, and handwriting is not sufficient

Delivery Duties Paid (DDP) Shipments, where you pay for tariffs in advance, will cross the border once a week

Inaccurate Manufacturer Information will cause delays to DDP shipments

Depending on court rulings against CBP and the Trump administration, Chinese-origin goods may potentially be reinstated to go under section 321. If this happens, tariffs will go away for Chinese made goods.

What does this mean for your shipments? 

Inaccurate, ambiguous or missing information will result in shipment delays, penalties, returns or disposal of the shipment.

Country of Origin Markings

Our May 27 Border Crossing was delayed due to an item bearing no Country of Origin (in what country the product was MADE). As shared by the driver from the CBP officer on duty:

For U.S. Customs compliance, every product must have the Country of Origin physically marked on the item itself—not just on invoices or packaging stickers. In the absence of such marking, CBP may presume foreign origin (e.g., China) if the item resembles commonly imported goods from China.

Key Takeaways

• The country of origin must be clearly and legibly marked on the item in English and in a conspicuous location
• The marking should indicate where the item was manufactured, not purchased or shipped from
• The marking must be permanent enough to remain on the item through normal handling
• Failure to comply will result in shipment delays 

Tariff Reduction for Goods from China, Hong Kong & Macau

The U.S. administration has released a new Presidential Action Sheet announcing a tariff reduction from 145% to 30% on imports originating from China, Hong Kong, and Macau which will remain in effect until Tuesday, August 12, from which it will raise to 54%.

If you use DDP postage for shipments subject to tariffs, please note that our tariff calculator has been updated to reflect the 30% rate. For any DDP labels purchased prior to this update that have not yet been dropped off, we recommend refunding and repurchasing the label to benefit from the lower tariff.

Please note: Refunds for USPS-based services may take up to 21 business days to process.

As noted in yesterday’s update, U.S. CBP is thoroughly checking parcels for verification of Country of Origin, and immediately refusing our entire truck upon discovery of a single misdeclared or ambiguous Country of Origin. Shipments crossing at the New York border were refused again, and we are awaiting the status of the shipments crossing in Washington.

Given the amount of shipments that need to be verified, any shipments that have been handed off to Chit Chats, but have yet to be inducted, are in the process of being returned to their branch of origin to be physically checked before being allowed to cross the border. Furthermore, all U.S. shipments will be subject to physical verification before leaving the branch for a U.S. bound trip.

Note: Chit Chats exercises the right to perform internal checks on your package as per the declaration that you sign upon creating your account. 

Shipments found to have been misdeclared or without the previously mentioned requirement of a discernable Country of Origin marking must be re-worked with our DDU options, or returned to you. Our staff will reach out to you to make necessary arrangements if required. All U.S. bound shipments are required to have all products to be physically labeled with the Country of Origin. Learn more here.

As anticipated, all goods of Chinese origin—including those from Hong Kong and Macau—are no longer eligible for Section 321, de minimis entry into the U.S. This means that U.S. tariffs will now apply to any shipment containing at least one item with a country of origin listed as China or its regions.

In addition, we are pleased to announce that we’ve launched our U.S. DDP (Delivered Duty Paid) options. These are essentially our USPS-based postage services (Chit Chats U.S. Select, U.S. Edge, USPS Priority Mail, etc.), and they will require you to provide a valid HTS code and manufacturer information for each shipment. These details are essential, as shipments using the DDP option now enter the U.S. through a different process.

To help you better understand how these tariffs are applied and calculated, we’ve published a new support article. We highly recommend reviewing it to ensure your shipments remain compliant.

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.

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?

Since the Canada-U.S. Free Trade Agreement was signed in 1988, Canadian goods have entered the U.S. tariff-free. Trump’s proposed tariffs would mark the end of more than 35 years of seamless trade and disrupt the United States-Mexico-Canada Agreement (USMCA), which replaced NAFTA in 2020. According to Trump, the tariffs are necessary to address what he perceives as unfair trade practices. He has linked these concerns to issues such as illegal immigration, the influx of Chinese goods, and the opioid crisis, specifically fentanyl.

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.