US de minimis - possibly lowered to 100 for Express shipments? Clarity and updates, please!

As per the following information posted on the eBay blog:

 

Finally, the terms of the USMCA suggest that the US will lower its de minimis threshold to $100 (from the current level of $800) for Express shipments. eBay is investigating this aspect of the agreement to confirm the countries’ intention.

 

I'm currently using cross-border couriers to move packages directly into the US delivery system (USPS, FedEx, UPS).  Will these type of couriers be considered 'Express' shippers, even though there is a one day delay for shipments to reach the US? 

 

Is this only if a shipment originates in Canada, using an 'Express' service?  Is this actually outlined in the USMCA as a true policy change? 

 

Clarity and help here, this could absolutely kill my business!

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Re: US de minimis - possibly lowered to 100 for Express shipments? Clarity and updates, please!


@lotzofuniquegoodies wrote:

Very curious to see a US buyers shock if suddenly they start seeing Custom Fees or Taxes when they purchase from a Canadian Seller after all these years more than likely never have seen how it affects us for our average purchase. Ship it and forget about it mentality!!


Taxes are levied (in theory) by 40-or so states, not the feds, in what's presently a rather toothless fashion.  The de minimis for duty was raised from $200 to $800 only a couple of years ago and I can't see it being rolled back to $100 without a lot of hackles being raised from various parties, unless this weird version of protectionism is strategic and relies largely on collective amnesia to be successful.

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Re: US de minimis - possibly lowered to 100 for Express shipments? Clarity and updates, please!

Personally I wouldn't bother wasting time trying to get information out of courier companies at this point; you could end up with a version of a version of what somebody thinks is likely to happen.  These people, regardless of how high up they are in the managerial chain, aren't legislators.  I also wouldn't get too wound up over discussions by or around eBay at the moment.  As 'reallynicestamps'  pointed out, the USMCA is, at this juncture, only an agreement, essentially a joint memorandum on the desired terms, not law in either country.  

 

The agreement still has to be reviewed, written in legislative language, ratified and passed into law in both Canada and the U.S.  In view of the looming U.S. midterm elections, it's not unthinkable that the U.S. Congress might balk if Democrats have more seats, forcing a whole new battle with Trump and putting the entire thing on hold until the 2020 U.S. election.  Or the Republican-held congress and senate in the U.S. may ram it through, only to have a Democrat-held congress overturn it, rewrite it, or stall its implementation somehow. 

 

Here in Canada it's also possible (although not likely, since the government's own minister was in charge and they hold a majority) that certain factions of Parliament might want some revisions, which could lead to delay.   

 

Frankly, our Prime Minister is in a extremely tough spot politically with this.  He's caught between Trump (and the current Congress) on the one hand, and the general Canadian abhorrence of being bullied by Trump into a treaty that nobody here really wanted to revisit.  As Pierre Trudeau once said "It's like sleeping with an elephant" -- and that was when U.S. politicians actually treated Canada as a trusted and valuable ally.  All we have to do is consider what Trump has already done to Canada's aluminum and steel industries, and the sort of retaliation he's hurled at China, to be very, very concerned about how delay on our part would be seen by Trump.  This will, after all, be one of the things he'll want to tout as his "great deal-making" to bolster support for the impending congressional elections.  

 

So although Trudeau might feel he must get this USMCA passed into law in Canada while Trump has an eye on him, I have no doubt he'll be watching its progress in the U.S. very closely.  If they can't get it through quickly (i.e. if Democrats take back the U.S. congress), I'm convinced our government will hold off pushing it through to law. 

 

But I digress.  If I were in your shoes right now, I think I'd try to relax and wait until the whole thing is passed as law in both countries before making any radical changes to your business.   If and when that does happen, legislative writers will include proper definitions of terms in the law, so that everyone will understand what is intended.  In the meantime: "Carry on Canada!".  

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Re: US de minimis - possibly lowered to 100 for Express shipments? Clarity and updates, please!

One thing you could do in the meantime is to email (or snail mail) your MP to express your concerns as a small businessperson and your support (or lack thereof) of the USMCA.   If you're in Montréal, you might even be lucky enough to have a Liberal MP.  You could also contact the Minister herself, or write to the PM directly -- but don't expect anything but a staff or pro forma reply from either of these, as they get far too much mail to deal with in any personal way (trust me, I used to do that job).  If you're a member of a business organization or group that can write to express its views, that would carry a lot more weight.   

 

The point is that with enough backlash and feedback from Canadians, our government might have more political cover at home to drag their feet a bit on passing this agreement into law, in the hope that the Democrats will prevail in the U.S.   

 

As I said, I doubt this was an agreement Trudeau really wanted to have to make (in fact he probably had no desire to dismember NAFTA at all), but he had to be seen  by the Americans as willing... or else Trump would think up a new punishment for Canada.  

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Re: US de minimis - possibly lowered to 100 for Express shipments? Clarity and updates, please!

Incidentally, if the USMCA does ultimately become the law of the land, there would likely be an implementation grace period or gap between the date on which it is passed and the point at which it actually takes effect, to give business (and border administrations) time to adjust.  So it isn't anywhere near a done deal yet.   And if Trump becomes a lame duck President, all bets may well be off anyway.  (Let's hope...)

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Re: US de minimis - possibly lowered to 100 for Express shipments? Clarity and updates, please!

Rose-dee,

 

Thank you so much for a view that I personally hold true.  The current situation as it stands is so tenable with this agreement and the language wherein this entire issue could come out of feels incredibly 'boiler plate' to me.  I was trying to focus on the information as presented by the eBay article and to have some clarity and updates, which of course can't/won't happen this early on.

 

I think not much will happen until 2020 anyways, even if the USMCA somehow gets rammed through, and I don't plan on changing my business at this point.  All cylinders are firing, 4th quarter is here!  YAY!

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Re: US de minimis - possibly lowered to 100 for Express shipments? Clarity and updates, please!

Very little actual information out there yet. This report here is about all I have been able to find from the US side that gives some more insight into what they were looking at leading up to the agreement. The original goal was to facilitate easier trade and avoid wasting time and money on the collection of duties and taxes on lower value packages but with the disparity in de minimis levels now we have a bit of a mess.

 

Note that some changes are already afoot. As of January all informal entries into the US will now require emanifests to be filed, even for goods under the Section 321 de minimis exemption. This seems counter to the text of the agreement, which stipulated creating a less complex process for informal entries that fall below the $2,500 duty free threshold. The US also announced they will begin the year long process of withdrawing from the universal postal union unless the terminal dues situation with China is addressed, so the proverbial poop will continue to be aimed at the fan for smaller crossborder trade for the forseeable future until this all shakes out. Either China starts paying it's fair share on international shipping could see significant disruption and change.

 

Leading up to the agreement there was talk around issues regarding imports going across the land border taking advantage of Section 321 exemptions. Specifically with large scale imports in China arriving by sea, being broken down and packaged as individual shipments declared under the $800 limit. There was quite a bit of talk about decreasing the US de minimis to address this, along with less convincing arguments for decreasing the limit based on a high limit making it easier to smuggle illicit goods into the US.  

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