Section 321 Removal: What Canadian Sellers Need to Know

The U.S. government has officially confirmed that the Section 321 de minimis program will be fully removed for all countries by August 29, 2025.

This is the most significant cross-border policy change in years — and it directly impacts how Canadian businesses ship to their U.S. customers.

Right now, many Canadian sellers rely on Section 321 to send eligible products to the U.S. tax and duty-free. After August 29, that benefit will disappear, except where trade agreement exemptions like CUSMA (Canada–U.S.–Mexico Agreement) apply.

Stallion has been working closely with customs brokers and trade partners to ensure Canadian sellers have clear, efficient, and competitive shipping options in this new landscape.

Why This Matters: Tariffs, Duties, and Canada’s Advantage Under CUSMA

While the U.S. recently announced steep tariffs on Canadian goods — with a headline rate of up to 35% — the actual average tariffs Canadian exporters pay are much lower.

This average, called the effective tariff rate, reflects exemptions tied to CUSMA:

• Current effective rate: ~6% (RBC) to 7% (BMO)
• Before July increase: Around 2.4% in June
• Comparison: China ~35%, Japan ~15%, UK ~8%
• High-tariff exceptions: Steel and aluminum at ~50%

If your goods qualify under CUSMA (e.g., made in Canada, the U.S., or Mexico), they may avoid tariffs entirely. However, some businesses miss out on this advantage because of paperwork complexity or missing Certificates of Origin.

Your Updated U.S. Shipping Options With Stallion

With Section 321 ending soon, here are your main options:

Option 1: Stallion DDP (Delivered Duty Paid)

The fastest and most predictable way to keep U.S. orders moving — with customs clearance handled in advance by a licensed broker.

What to expect:

• Brokerage fee: $0.99–$1.99 per package (based on shipping volume)
• Duties/tariffs based on country of origin and HS code
• Possible duty/tariff waiver under CUSMA (confirmation pending from U.S. authorities)

How it works:

1. Purchase USPS labels in Stallion as usual
2. Brokerage/duty fees show at checkout
3. Pay, print, and ship — same transit times as before
4. Clients outside Ontario may see +1–2 business days for clearance

Tip: Sellers shipping China-made products have been using Stallion DDP since May, and it’s running smoothly.

How to Prepare Before Aug 29:

• Update the country of origin and manufacturer info in your Stallion dashboard
• Submit SKUs for broker approval (instant for most)
• Watch our DDP setup tutorial and get ready now

Option 2: Canada Post DDU (Delivered Duty Unpaid)

This service will still be available, but expect:

• Duties, tariffs, and brokerage fees to apply
• Higher risk of U.S. Customs rejections (due to confusion over duty collection between Canada Post and USPS)

Recommendation: Transition to Stallion DDP for more predictable delivery and fewer customs issues.

Option 3: U.S. Fulfillment With Stallion

If you have consistent U.S. order volume, moving inventory into the U.S. may now be the most cost-effective option.

Stallion owns and operates its own U.S. fulfillment network — starting with our Buffalo warehouse — giving you the same advantages as domestic U.S. sellers:

• Faster delivery times
• Lower shipping costs
• No surprise duties/tariffs on U.S.-based orders

Key Takeaways for Canadian Sellers

• Section 321 ends Aug 29 for all countries
• CUSMA can still protect many Canadian goods from high tariffs — but only if properly documented
• Stallion DDP offers the smoothest post–Section 321 shipping process
• U.S. fulfillment is now a stronger option than ever for high-volume sellers

If you’re unsure which shipping method works best for your business after Aug 29, our team is here to help you deal with the changes.

Contact Stallion Express today to review your products, confirm CUSMA eligibility, and set up your preferred U.S. shipping option before the deadline.

Jose Sagun

Jose is Stallion's Senior Business Analyst. He helps improve the company’s shipping processes, works closely with delivery partners, and looks at shipping data to find the best prices for our customers. Outside of work, Jose has a passion for running, regularly completing 5k and 10k runs, with the goal of running a full marathon in the near future.