Remember NAFTA? Well, starting on July 1, 2020, there’s a new deal in town. The United States-Mexico-Canada agreement will take effect on that day, effectively replacing NAFTA and affecting countless eCommerce businesses. Read up about it here, because if you’ve ever shipped a package internationally, there’s a good chance this new agreement will affect you, too.
If I Ship to Canada or Mexico, How Will the United States-Mexico-Canada Agreement Affect Me?
The new United States-Mexico-Canada agreement places a new de minimis threshold on individual shipments traveling from the United States to either Canada or Mexico. However, some thresholds are still staying the same under the NAFTA structure. For instance, shipments sent from the USA via USPS and brought in through Canada’s postal service (Canada Post) will continue to be subject to the current de minimis threshold under NAFTA (CA$20). Therefore, any item shipped via Canada Post with a value that exceeds CA$20 will be subject both to duties and taxes under the new agreement…and anything worth less won’t be.
What is a “De Minimis” Threshold?
A de minimis threshold signifies the highest value a shipment can be before it becomes subject to taxes and duties.
We’ve listed these de minimis thresholds for you below:
- $20 CAD for postal shipments (unchanged)
- $40 CAD for tax and duty relief for express shipments (new)
- $150 CAD for duty-only relief for express shipments (new)
- $300 USD for postal shipments (unchanged)
- $50 USD for tax and duty relief for express shipments (unchanged)
- $117 USD for duty-only relief for express shipments (new)
Saving Money on International Shipments is More Important Now Than Ever
With these new tax structures taking effect on July 1st, saving the most money on international shipments is now more important than ever before. Simply put, you’ll save the most money when you you use free shipping software to buy postage online.
The best shipping software options let you access USPS discounts like Commercial Pricing, which is the deepest level of savings that USPS typically only reserves for huge shippers sending out 50,000 or more packages per year. When you use shipping software, you can buy shipping labels for all of your domestic packages, as well as your international ones. It’s also super easy to fill out customs forms with most of them, making the process as easy and fast as a few clicks.
Our personal favorite shipping software, Pirate Ship, even offers an invite-only international service that they call Simple Export Rate. Simple Export Rate is by far the cheapest way to send international packages under 4 lbs. You won’t find better rates anywhere else…and with these new de minimis thresholds, you’ll want to be able to ship your international packages at the cheapest rates possible. Look into it and thank us later!