‘Big blow’: new front opens in tariff war

Kali Martin has listed: tumblers decorated with belly dancers, cat-shaped salt and pepper shakers and two ceramic schnauzer dogs to hang on walls.

Until recently, Americans would peruse her Etsy profile and buy the items. United States clients account for nearly all of Atomic Age Vintage’s online sales, Martin said.

Not anymore. Martin has joined droves of Manitoba business owners ending U.S. sales ahead of a spike in duties on low-cost U.S.-bound packages.

Platforms like Etsy and eBay have announced major shipping changes. Canada Post has involved a third-party platform to handle the new duties.

U.S. President Donald Trump is halting the de minimis exemption, which allowed items under US$800 in value to enter the U.S. tariff-free, starting Friday. Most Canadian goods that were previously shielded will face a 35 per cent tariff, a Canada Post memo to post offices reads.

“(I’m) devastated,” Martin said. “It’s potentially a big blow.”

She’s been selling vintage wares through Etsy, an online marketplace, for more than a decade. Running Atomic Age Vintage is Martin’s full-time job.

Though many purchases come locally — in-person through antique malls and sales — the higher-cost transactions typically happened on Etsy, Martin said.

She’s now questioning whether to keep paying to post online.

As of Monday, Etsy has stopped issuing U.S.-bound Canada Post labels to sellers. In a blog post, Etsy encouraged businesses to use other couriers — those that allow sellers to pay the tariff cost before shipping to American clients.

“I’m not just going to eat that cost,” Martin said.

To calculate the tariff on each item and up the customer’s price would be a “logistical nightmare,” she added: new duties depend on country of origin and for vintage goods, the source country can be unknown. Martin would have around 279 items to sift through.

Lisa Boland, a fellow vintage retailer, is eyeing new countries as customer bases. Online commerce platform eBay announced it will create an international shipping hub based in Mississauga, Ont. — Canadian sellers’ goods will be transported internationally from the facility.

Boland plans to ship Bitchin’ Kitsch ‘n’ Kitchen wares to eBay’s hub after it opens in October. For now, she’s expecting a drop in sales — Americans make up 80 per cent of her current customer base, she estimated.

“There’s really nothing we can do, at this point, other than wait for American consumers to raise hell once they realize that they’re going to have to pay through the nose to get … stuff that might not be available in the States,” Boland said.

She’s planning to run auctions to clear some stock.

Internationally, more than a dozen countries’ national postal services (including Mexico, Switzerland, Japan, Australia, India, New Zealand, and the U.K.) said they’d temporarily suspend sending U.S.-bound packages because of processing and payment confusion.

Locally, most of the Manitoba Craft Council’s 300 members have paused their U.S. sales, said executive director Tammy Sutherland.

Many member businesses are one- to two-person operations. Research time, paperwork and brokerage costs are prohibitive to shipping to the United States, Sutherland explained.

Selling in other countries often isn’t feasible, Sutherland continued — shipping is generally more costly. Pre-de minimis pause, shipping within Canada could be pricier than sending goods to the United States, Sutherland and makers told the Free Press.

Some artisans are closing their businesses, Sutherland continued.

“It’s sort of like a cumulative effect — there was COVID (pandemic) and there were postal disruptions, and now there’s this,” she said, adding some will “keep pivoting because they have to, they’re all in.”

Long Way Homestead plans to sell more of its wool interprovincially. It hasn’t yet tried selling its wood pellets — fertilizer made from waste wool — outside of Manitoba yet, said owner Anna Hunter.

Thirty per cent of the Canadian Federation of Independent Business’s roughly 4,500 Manitoba members expect they’ll be impacted by the de minimis pause. Another 33 per cent said they don’t know yet.

“Those who aren’t even aware this change is coming, that’s quite alarming,” said Brianna Solberg, CFIB director of legislative affairs for the Prairies and northern Canada.

A drop in shipments will have a ripple effect in air cargo, noted Barry Prentice, a University of Manitoba professor who studies supply chain management.

The Trump administration has called the de minimis exemption a loophole for foreign businesses to evade tariffs and for criminals to sneak contraband.

More than one billion packages entered the United States via the de minimis exemption in 2023.

Canada Post has tapped Zonos, an international commerce software company, to collect new duties before items enter Canada Post’s network. Zonos will remit the money directly to U.S. Customs and Border Protection, a memo from Canada Post reads.

Gifts under US$100 sent from Canadians to the United States will not be tariffed by the loss of the de minimis exemption, Canada Post’s memo states.

— with files from The Associated Press

gabrielle.piche@winnipegfreepress.com