A Quebec soft drink distributor has decided to stop exporting to the US after orders were blocked at customs and mass returns to sender cost it a small fortune.
“In a few days we saw 35% of our turnover disappear,” laments Simon Poulin, CEO of Upside Drinks, at his Longueuil warehouse.
• Also read: Let's end 100% tariffs on Chinese cars
Result: the company suspended deliveries to the United States.
The “de minimis” rule is in question
“We are a distributor. We buy directly from producers everywhere, including in Quebec, and resell online,” explains the man, who built his business in 2022 in his basement.
“Previously, if the price was below $800, US customs wouldn't even look at the package. The carrier would simply ask for a commercial invoice. However, 95% of our sales are orders under $800.”
This rule, known as “de minimis”, was lifted in September.
“We told ourselves, 'It doesn't matter, it's just going to be a little more paperwork because our products are protected by trade agreements.' But it didn't work out as planned,” he continues.
Each package can now be inspected and subject to duties and taxes, sometimes up to 30% of the cost of the product.
The big blow came in early October when UPS warned shippers it was suspending its guarantees for shipments to the United States.
“They told us directly, 'Don't ship to the United States anymore.' Since then, packages not cleared from customs within seven days are automatically returned and UPS no longer reimburses the sender.”
Moreover, U.S. customs officials, who are too few in number, no longer supply the thousands of containers of goods they must now inspect.
“In practice, we are faced with the fact that thousands of parcels were rejected and then sent home, all at our expense,” sums up Simon Poulin. “And our American customers receive nothing and do not understand why we charge them more.”
USA on pause
Instead of waiting, Upside Drinks decided to adapt its model.
“We are not abandoning the United States, but we are putting it on pause,” says the CEO.
The company opened a warehouse in Vancouver “to better serve [ses] Canadian Customers” and now focuses on domestic distribution to bars, hotels and local businesses.
“We want to sell a lot more here, coast to coast, without the uncertainty of the American border.”
This maneuver does not come without costs.
“At the moment, since the United States accounts for 35% of our orders, we have had to lay off employees. We could complain, but we prefer to return to normal. The United States will remain for later,” he concludes.
MINIMIS RULE
As of August 29, 2025, the U.S. “de minimis” exemption, which allowed low-value packages (up to $800) to enter the United States without duties or formalities, was suspended for all countries. Any shipment to the US may now be subject to duties and taxes, regardless of the amount. Therefore, shippers must anticipate costs and complete customs paperwork.
NEW UPS RULES
- As of October 2, there will no longer be service guarantees for US shipments;
- Systematic return of parcels not released by customs within seven days;
- No refunds for blocked shipments;
- Recommendation that companies temporarily stop exporting to the United States.
