Reselling News: Canada Puts a 50 Percent Surtax on US Clothing and Small Parcels Do Not Escape It

Trade policy usually reads like somebody else's problem until the schedule names the exact category sitting in your bins. On Tuesday morning one did, and the tier it landed in is the top one.

Canada's counter tariffs took effect September 8, and clothing sits at 50 percent

Canada imposed surtaxes on roughly 27.6 billion Canadian dollars of US-origin imports at 12:01 a.m. on September 8. The Department of Finance published the product list and describes the measure as "15, 25, and 50 per cent tariffs on products drawn from those targeted by U.S. Section 338 and Section 232 tariffs." Each product's rate mirrors the US rate on the matching good, which is why so much of the list sits at the top number.

Most coverage framed this as a steel and dairy story. Read the schedule and it is also an apparel story. Women's dresses, men's suits, jerseys and pullovers, overcoats and gloves are all in the 50 percent tier. So are tableware and kitchenware, perfumes, and lip and eye makeup. Carpets and floor coverings sit at 25 percent, as do stoves, ranges and cooking appliances. That is not an abstract list. That is a used Carhartt jacket, a stack of vintage tees, and a box of Pyrex.

The small parcel exemption does not save you here

This is the part worth reading twice, because the instinct is to assume a 40 dollar sweatshirt is too small to matter. It is not.

The Canada Border Services Agency's Customs Notice 26-23 is explicit. The surtax runs 15, 25 or 50 percent "of the value for duty, as applicable," and it applies to US-origin goods "including those that may be eligible for the remission of customs duties, sales and/or excise taxes under the Postal Imports Remission Order or the Courier Imports Remission Order." The notice then states it plainly: "Surtax is applicable on shipments that fall under de minimis thresholds."

Under CUSMA, a courier shipment from the US normally clears duty free below 150 Canadian dollars and tax free below 40. Neither of those floors covers a surtax. A cheap parcel gets billed the same percentage as an expensive one.

The one carve out is timing. CBSA says the surtax "will not apply to U.S. goods that are in transit to Canada on the day on which the surtax comes into force," including goods that shipped before it started.

What to do about it: your Canadian buyer pays this at the border, not you, but you are the one who eats the consequence. Expect refused deliveries, cancellation requests after the courier calls for money, and negative feedback from buyers who did not read the fine print on an international listing. If Canada is a meaningful slice of your sales, say so in the listing in your own words rather than trusting the platform disclaimer, and never quote a buyer a landed cost you cannot actually stand behind. If Canada is one order a month, this is background noise.

eBay is turning away some US electronics headed to Canada

Separately, Value Added Resource reported on September 8 that Canadian buyers are finding US computers, network switches and other electronics suddenly rejected or excluded from eBay International Shipping. One buyer described it as eIS "straight up refusing to ship to Canada yet holding payment for weeks."

eBay has not said whether this is a new internal restriction, a shipping partner reading export rules conservatively, or something else, and the published eIS restrictions do not list a blanket electronics ban. Treat it as unexplained rather than as policy. eBay also added a free drop off option at its Mississauga eIS hub, which helps Canadian sellers and does nothing for American ones.

What to do about it: if electronics move through eIS for you, watch for orders where payment is held and nothing ships. Catch one early rather than finding out through a case.

The takeaway

A rate change on a government schedule becomes a real cost the moment it touches a category you already own. Knowing which of your channels can absorb that and which one quietly hands the bill to your buyer is a sourcing decision, not a paperwork decision, and it is the kind of thing we work through inside The Income Lab.

Hero image: Canadian Customs at the Ambassador Bridge, Windsor, Ontario, by Ken Lund, CC BY-SA 2.0 via Wikimedia Commons.