As online shopping became more popular, foreign retailers like Temu, Shein, Amazon and Etsy would use this exemption to ship cheap products directly to U.S. consumers duty-free. Purchasing foreign products will become more expensive for U.S. consumers as foreign businesses will have to pay more to ship products to the U.S. Small and medium businesses with tight margins will most likely have to pass the increase in price of shipping to the U.S. to the U.S. consumers. These changes could make it more challenging for businesses to sell to U.S. consumers right now.
Canadian small and medium businesses will be affected too. About ⅓ of Canadian exporters relied on the exemption to ship duty-free to U.S. customers. Now, low-value shipments will be subject to taxes and duties the same way mid- and high-value shipments are. For instance, if two shipments are going into the U.S. from Canada: one is a $100 shipment, and one is a $2,000 shipment, both would be applied taxes and duties at the same rate, at the rate agreed between Canada and the U.S. This change will also create new paperwork businesses have to fill out, and delays as all international shipments will have to go through a documentation and customs process to enter the country.
