At Fleece & Harmony, a woolen mill and yarn shop in bucolic Belfast, Prince Edward Island, owner Kim Doherty used to give you the chance to send yarn skeins to U.S. customers across the border with little fanfare.
The yarn orders normally met an import tax exemption for packages valued at under $800, meaning it might be imported tariff-free and avoid the customs process.
But ever because the Trump administration eliminated the exemption as of Aug. 29, the associated fee to send yarn to U.S. customers has skyrocketed.
The bill for a US$21 ball of yarn now includes $12 to $15 in brokerage fees that her shipper UPS charges, plus state taxes and a 6.5 per cent tariff, all of which just about doubles her costs.
“We had orders which have reached the purchasers and so they’re in shock concerning the indisputable fact that they should pay,” she said. “And it’s amazing how many individuals really didn’t know what the impact was going to be.”
Eliminating the so-called de minimis exemption was meant to curb drug trafficking and stop low-quality goods from discount sellers like Temu and Shein flooding the U.S. market.
But because the all-important annual holiday shopping season kicks off, it’s putting a crimp on small businesses and shoppers now facing higher costs.
Chad Lundquist in Fort Lauderdale, Florida, ordered fragrance oil from a site called Oil Perfumery in October, but he didn’t realize the business was based in Toronto, Canada. His total was $35.75, which included an $8 standard shipping fee. But when his package arrived, he was hit with a $10.80 tariff bill from FedEx.
“It wasn’t definitely worth the $10 tariff for a $27 purchase,” Lundquist said. Oil Perfumery didn’t reply to a request for comment.
He’s not the one skittish shopper.
Three months after the exemption ended, sellers abroad are reporting drastic declines in U.S. sales. Some are paying the duties themselves as a substitute of passing them to consumers. Also they are attempting to concentrate on domestic customers to interchange U.S. ones and adjusting product lineups to feature best selling items to attempt to goose sales.
Martha Keith, founding father of British stationery brand Martha Brook, which is predicated in London with a small office in Melbourne, Australia, said U.S. sales from her Etsy store — her fundamental e-commerce channel along with her own website — were up 50 per cent for the yr before the exemption ended. But sales fell dramatically when the tariffs hit, and proceed to drop although she’s paying the import taxes and customs fees herself so customers aren’t impacted. Sales are down about 30 per cent year-over-year.
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“The difficulty appears to be in customer confidence hitting the need to order from businesses outside of the U.S., due to confusion about how the tariffs will affect them,” Keith said.
She’s also in a bind because she sold a £109 ($144) stationery advent calendar to about 344 U.S. customers ahead of the tariffs, and needed to ship them under the tariffs. Shipping and tariffs cost her a further £5750 ($7590) to cover shipping the appearance calendars already sold.
“The entire thing has been a little bit of a nightmare for businesses like ours, and such an enormous shame, because the U.S. market was such a helpful growth area for us, particularly through Etsy,” she said.
The timing was particularly bad for Sue Bacarro, who along along with her sister co-owns Digi Wildflowers, an Etsy shop that sells embroidered baby blankets, gifts and custom quilts for wedding and anniversaries, positioned across the border from Detroit in Windsor, Ontario.
Before the announcement of the removal of the de minimis exemption, they placed a big inventory order to arrange for the vacation season and early 2026 demand. But when the de minimis exemption ended, “inventory wasn’t moving as expected, and we suspected customers were hesitant to buy resulting from potential duty charges,” Bacarro said.
Sales — 70 per cent of which come from Americans — finally began to rebound when Digi Wildflowers prominently added a banner on its site that said, “U.S. Import Duties On Us.”
“Heading into this holiday season, we’re keeping that message front and center through banners, social media, and direct communication,” said Bacarro, who can be expanding their product line.
But not all businesses can — or need to — pick up the tariff tab.
Kim Doherty, who runs the woolen mill on Prince Edward Island, doesn’t plan to pay the tariff and costs for her customers.
“I’m not able as a small business owner to try this. The profit margins are already relatively thin,” said Doherty, adding that “on principle,” she shouldn’t should do it.
Without delay, her shipments to U.S. customers are about 10 per cent of what they were. As a substitute, she’s working on expanding her fiber offerings to Canadian customers at her brick-and-mortar store and fiber festivals.
“We’ll see what happens,” she said. “I’m pretty sure that my U.S. customers were shopping and never even enthusiastic about it, but now they’ll be evaluating the purchases that they’re making, knowing that they will have the additional fees on top of whatever they see.”
Some Etsy businesses have been stymied by international postal services temporarily halting deliveries to the U.S. due to confusion across the ending of de minimis.
Selene Pierangelini’s business, Apricot Rain Creations, based in Brisbane, Australia, which sells crystals, candles, and spiritual wellness products on Etsy, trusted the Australia Post to get deliveries to U.S. customers. Greater than three-fourths of her customer base comes from the U.S. Australia Post suspended service to the U.S. for a couple of month, resuming on Sept. 22.
She temporarily switched to FedEx and UPS — private shippers which can be costlier than Australia Post. Because it resumed, Australia Post is working with Zonos, a provider of cross-border shipping technology, to supply a shipping calculator that lets her prepay duties and costs. They themselves charge a fee of $1.69 plus 10 per cent of the overall duty fee.
To this point, the items she ships from Australia have been tariffed at a ten per cent rate, the baseline tariff for the country. She increased her shipping costs to assist cover the expense. It’s manageable, but tricky, she said.
“You don’t really know the way much (the associated fee) goes to be until the package clears custom within the U.S., and also you get an invoice which is mechanically paid out of your account,” she said.
And her sales haven’t recovered. Before the tariffs, her U.S. sales were about 85 per cent of her total sales, and now they’re around 35 per cent. She’s hopeful individuals are just holding off until Black Friday and Cyber Monday holiday sales.
Within the meantime, she has restarted sales to Europe, which she had paused in 2024 resulting from increased regulations. And he or she’s launched a Facebook marketing campaign and is exploring print-on-demand services from U.S.-based providers for production and success.
“This case highlights how fragile small businesses may be when depending on one market,” Pierangelini said. “While it has been a shock, it’s also pushed me to diversify — something that may hopefully make my business stronger and more resilient in the long term.”