Where Things Stand
In March 2025, the US imposed 25% tariffs on most Canadian goods. Canada responded with retaliatory tariffs on a broad list of US imports. As of early 2026, both sets of tariffs remain in place — though the scope and specific product categories have been adjusted several times.
The key numbers: 25% on most Canadian goods entering the US, and Canadian retaliatory tariffs on roughly $30 billion CAD worth of US products. Neither side has reached a negotiated settlement.
This is not theoretical — it directly affects what Canadian merchants can sell to US customers, at what price, and whether the economics still work.
What This Means If You Sell to US Customers
If you ship physical goods from Canada to US buyers, those goods are now subject to US import duties when they cross the border. The tariff gets collected by US Customs — either from the buyer (as an import fee at delivery) or baked into your retail price.
A product you sell for $50 USD now costs your US customer $62.50 USD landed, before shipping. That's a real competitive disadvantage against US-domestic sellers who face no tariff.
The De Minimis Threshold
The US has a de minimis threshold: goods valued under $800 USD per shipment historically cleared customs duty-free. This exemption was a lifeline for Canadian DTC (direct-to-consumer) merchants shipping small parcels.
The current status: de minimis still technically exists at $800 USD for most goods, but Canadian-origin goods have faced increased scrutiny, and the rule has been politically contested. The practical reality is that customs brokers and carriers are seeing more parcels held for formal entry, and the exemption is not as reliable as it was in 2023 or 2024. Assume you cannot count on it for planning purposes.
Customer Experience Problems
Even if duties are technically your buyer's responsibility, the experience is messy. US customers who expect a clean checkout — price + shipping = done — are increasingly surprised by a "duties and fees" charge at delivery. Chargeback rates go up. Reviews go negative. This is a fulfillment and customer service problem, not just a cost problem.
What the Tariffs Don't Affect: Your Payment Processor
Your payment processor doesn't charge tariffs and isn't involved in customs. Transaction fees from Stripe, Square, Helcim, or Moneris are unchanged by trade policy.
What has changed is the USD/CAD exchange rate volatility. The trade conflict has pushed the Canadian dollar lower and increased FX swings. If you're accepting USD payments and converting to CAD on the processor's schedule, you're exposed to that volatility.
The fix: hold USD in a USD bank account and convert when rates are favourable. See the cross-border payment processing guide for the full setup — that strategy matters more now than it did a year ago.
Canadian Processors vs US Processors: What Matters Now
| Processor | USD Settlement | Cross-Border Fee | FX Conversion | Tariff Help? |
|---|---|---|---|---|
| Helcim | ✅ To Canadian USD account | 0.5% cross-border | Avoid if you hold USD | ❌ Not applicable |
| Moneris | ✅ Multi-currency account | Built into rate | Avoid if you hold USD | ❌ Not applicable |
| Stripe (Canada) | ❌ Always settles in CAD | 1.5% | 2% mandatory FX | ❌ Not applicable |
| Stripe (US account via Atlas) | ✅ USD to US bank | 0% (domestic US) | None | ❌ Not applicable |
| Square (Canada) | ❌ CAD only | 1.5% | Automatic | ❌ Not applicable |
| Shopify Payments | ❌ CAD only | 1.5% | 1.5% FX fee | ❌ Not applicable |
No processor solves the tariff problem — that's a customs issue, not a payments issue. But using Helcim or Moneris with USD settlement avoids piling FX losses on top of tariff losses. Using Canadian Stripe means you pay 2% FX on every US transaction on top of everything else.
Practical Moves for Canadian Merchants
1. Reprice for the US Market
If you want to keep selling to US customers, absorb part of the tariff in your margin or raise US prices explicitly. A separate USD price list that includes your estimate of the tariff burden is cleaner than letting buyers get hit at the door.
Tools like Shopify Markets let you set independent USD prices — use them. Don't just auto-convert your CAD prices at today's exchange rate and call it a USD price.
2. Show Landed Cost at Checkout
Nothing kills conversion faster than a surprise customs invoice. If you're shipping to US customers, either:
- Use a landed-cost tool (Zonos, Avalara, or a Shopify customs app) that calculates and collects duties at checkout, or
- Be explicit in your product descriptions: "US customers: this product may be subject to import duties of approximately 25%."
Delivered Duty Paid (DDP) shipping means you pay the duties upfront and include them in your price. Delivered Duty Unpaid (DDU) means the buyer pays at delivery — and often resents it. DDP is better for customer experience but requires you to know your HS codes and pre-calculate duties.
3. Open a USD Account
If you're still processing US sales, get a USD bank account and route your USD settlements there. RBC, TD, Scotiabank, and BMO all offer USD chequing accounts for Canadian businesses. Wise Business is worth considering — lower FX rates when you eventually convert, and you can hold USD indefinitely.
Convert USD to CAD on your schedule, using Wise or a currency broker (Knightsbridge FX, OFX), not your processor or bank at their daily rate.
4. Consider CAD-Only Pricing for Canadian Customers
The retaliatory tariffs mean US goods coming into Canada are more expensive — which actually helps Canadian merchants selling domestically. If you've been pricing your Canadian store in CAD but running pricing decisions based on USD cost inputs, revisit your Canadian margins. The domestic opportunity may now be better than the US opportunity.
5. Pause or Redirect US DTC Volume
For merchants where the tariff makes DTC unworkable — particularly those selling goods in price-sensitive categories — there are a few structural alternatives:
- US 3PL: If your volume is high enough, stocking inventory in a US fulfilment warehouse eliminates cross-border shipping and tariff exposure on each individual parcel. The tariff applies when you bulk-ship to the warehouse, not on each customer order. At sufficient volume, this is often cheaper than paying 25% per transaction.
- Amazon.com marketplace: Selling on Amazon US via FBA (Fulfilled by Amazon) moves the customs complexity to Amazon's infrastructure. You still pay import duties on the inventory you send to Amazon warehouses, but you avoid per-parcel customs complexity for your customers.
- Pause US sales: This is a legitimate decision. If the math doesn't work, stop taking US orders and redirect that marketing spend to Canadian or non-US markets. Better to be honest with yourself than bleed margin on every US transaction.
Alternative Markets Worth Your Time
Given US trade uncertainty, Canadian merchants with international-capable storefronts should look at markets where Canadian goods don't face punitive tariffs:
| Market | Tariff Situation for Canadian Goods | Payment Considerations |
|---|---|---|
| 🇬🇧 United Kingdom | No punitive tariffs. CETA-adjacent trade relationship. | GBP settlement; Stripe UK account worth considering at volume |
| 🇦🇺 Australia | No punitive tariffs. English-speaking, high purchase intent. | Stripe AU available; AUD/CAD FX is manageable |
| 🇪🇺 European Union | CETA in force — reduced or zero tariffs on most goods. | SEPA payments; EUR more stable vs CAD than USD currently |
| 🇨🇦 Canada (domestic) | No tariffs. Interac available. CAD — no FX at all. | Best margins. Interac e-Transfer, PAD, domestic card rates. |
None of these markets is as large as the US. But the combination of UK + Australia + EU is comparable in total English-speaking purchase volume, and your goods enter duty-free. The diversification argument was always theoretically sound — it's now practically urgent.
Payment Routing Summary
If you decide to keep selling to the US:
- Use a processor that supports USD settlement — Helcim or Moneris for Canadian accounts, or a US Stripe/Square account via a US entity if your volume justifies the overhead
- Route USD revenues to a USD bank account; don't auto-convert
- Convert to CAD using Wise or a currency broker, not your bank
- Use landed-cost tools or DDP shipping to prevent checkout surprises
- Set independent USD prices — don't rely on automatic CAD-to-USD conversion
If you're redirecting focus to Canadian customers:
- Drop cross-border fees from your margin calculations — everything improves
- Add Interac e-Transfer or PAD for customers who prefer bank payments
- Price aggressively against US competitors who now face their own retaliatory tariff exposure selling into Canada
The Bottom Line
US tariffs on Canadian goods aren't a payment processing problem — they're a business model problem. Your processor can't solve customs. But the payment decisions you make (settlement currency, processor choice, when to convert FX) layer on top of the tariff math. Getting those decisions right means fewer basis points lost on top of what you're already absorbing.
The merchants who fare best in this environment are the ones who:
- Know their true landed cost into the US (including tariff and duty)
- Price their US store to reflect that reality
- Hold USD rather than converting at spot
- Actively cultivate non-US markets as a hedge
The ones who struggle are the ones treating this as a temporary situation and keeping 2024 pricing while watching margins compress.