Nov 5: PSA on Canada to USA knife shipments after the $800 duty exemption was removed

This is a living document which we are updating as the days go by with our experiences and learnings about shipping knives to the USA from Canada since the removal of the de minimis $800 exemption from duties.

While the USA has eliminated the $800 exemption from duties on shipments from Canada, as long as the product is truly made in North America, it can still cross the border duty free, which means our products should ship to USA customers as before, particularly because we are using American steel. If we were using non North American steel, the whole cost of the knife is subject to at least 50% duty unless the correct chapter 99 tariff codes (see next paragraph) are used to report the steel component of the knife so that only the steel part is dutied. But if the steel is American made, the duty goes away. The first challenge was to find the right tariff codes to describe all that, particularly the steel exclusion codes for USMCA, IEEPA and section 232 tariff regimes. The second, greater, challenge is that the shipping carriers and the shipping platforms like Shipstation, weren’t prepared to handle multiple tariff codes per commodity, especially when no user entered codes were required before for under $800 shipments. Even the API used by UPS does not support multiple tariff codes per product, so platforms like Shipstation, that need that API for UPS shipments, don’t have a way to properly transmit and group those codes together. The chapter 99 codes are modifiers of the base commodity code. Probably no carrier wanted to break the APIs by adding that hack, since the 99 codes are “temporary” anyway.

Our first 12 shipments starting August 29 were incurring those over 50% duties (we halted USA shipments until we could avoid those charges) and most customers refused to accept those shipments. We thought we were shipping them correctly by including a USMCA certification of origin and the correct tariff code to describe the knife. We did not know that the US government had added knives into their so called steel derivative products list in the HTSUS tariff bible, chapter 99. The steel tariffs aren’t just about construction grade steel, they are now affecting a lot of products imported to the USA with steel in them. We’ve learned that it requires 4 of those chapter 99 tariff codes at this writing, along with the base commodity code to describe our products’ duty free status, plus a certification of USMCA origin (when the shipment is under $2500 USD, a USMCA declaration in the commercial invoice is sufficient).

Those post August 29th knives are still trickling back to us now. Of the 12 shipments:

• 4 customers paid duties and we have disputes in with UPS that look promising but glacially slow for the customers to be reimbursed those charges.
• 5 of the refused knives have finally made it back to us.
• 3 have been in limbo, since our customers refused the shipments, 1 claim has supposedly been paid out, but I haven’t seen evidence yet.
• two weeks ago we received an overdue notice for the 8 packages customers refused, telling us we need to remind our customers to pay the duty charges or they will be reversed back to us! Since then UPS has confirmed that they have fine print to back up why we have to pay duties on knives that were returned to us after a temporary stay in the USA. Apparently this also applies to knives that they lost while returning to us. This is especially discouraging because none of the knives should have incurred duty in the first place. The costs have been escalating at every turn. I will try to contest this but I haven’t much more time to waste on the whole fiasco. We’ll have to take the loss, I suspect.

For us it’s been an enormous distraction, using close to 100% of my time for over 2 months. During that time I’ve gotten way more familiar with shipping and tariffs than I ever wanted to be. The carriers (and CBP) have been buffaloed overnight into doing a ton of extra work. They are using AI to scan shipment data and a lot of mistakes are being made. It also seems like there is a universally poor understanding among the large carriers of how their shipping tools should be adapted to situations like ours. No one and no document that I have seen to date explains how to do what we need to do. They just seem content to tell you to alert your customers of the high duties or build them into your prices and pay them up front.

However I have also turned back to DHL which has always had good cross border service but can be very expensive for more remote parts of the USA. In the DHL test shipments so far, a few got through without duty and one or two had incorrect assessments, plus 3 shipments with folders have all been returned. DHL Canada now deems all folding knives as weapons and they don’t allow weapons in their network. Back in 2017 it was DHL who recruited us as a customer, knowing exactly what we did and we never had a knife shipment refused/returned. I connected with a senior account rep at DHL and he promised us a solution for reliable declarations of our steel derivative products. Nothing came of that promise. However we continue sending DHL test orders to gauge the consistency of their assessments. Though they are very slow (for an express service), they do seem to mostly be entering the tariff codes properly with CBP. 

Learnings summary:

1. carriers and their shipping tools and the platforms that use their APIs (like shipstation) still don’t have a reliable solution for handling derivative steel/aluminum products. UPS has layed off 48000 employees so far in 2025, and meanwhile took on mountains of new work post de minimis; morale there does not seem good, so the work quality isn’t good. DHL seems to be less evil than UPS and more organized, yet their unexplained policy change with folding knives is exasperating.
2. The published guidance, post de minimis removal, from the big carriers is mostly obvious fluff, nothing that covers cases where multiple tariff codes are needed per commodity, like knives or aluminum tennis rackets.
3. In the meantime, because we haven’t gotten plausible answers from the “experts,” we’ve had to learn through sending test shipments to willing customers. It is now looking like we will use UPS for folders and DHL for fixed blade knives. We have contacts in both carriers that should allow us to get shipments with wrong duty assessments fixed before the customer pays the corrected customs clearance fee (in UPS’s case, mainly); DHL is a more expensive service so they don’t seem to charge extra for clearance like UPS does. We have added a popup message to our checkout page that provide our current best practices for USA shipments, so prospective customers better understand what they are going to face. The current wording in the popup as of this writing is:

This is a must-read for our American customers.

We continue converging toward eliminating duties on our products shipped to the US. It’s taken way longer than we wanted, but UPS and DHL seem to be getting better at processing the tariff codes we are providing to them and even if they don’t get it right initially, we now have a fairly streamlined way to contact them to make corrections.

After we ship, we’ll provide a tracking number. Use the carrier’s tracking notification tool to get all updates on shipment progress. If you receive a notification from UPS or DHL indicating fees owing, where the fee details show government charges/duty, let us know immediately. The sooner we hear from you, the sooner we can get it corrected. Do NOT pay the fees at this point because we need a day or two to get a reassessment. We will stay in touch with you about the status. If it looks like a delay might risk the package being returned to us, we’ll advise you to pay the fees owing and then request a reimbursement from the carrier. We want to avoid packages returning to us, as the cost is enormous.

Finally, be aware that although we will do our best to have the carrier fix the duty, often times there will still be customs clearance fees owing (these are usually between $10-20 USD).

We will continue to update this post as needed to keep you informed.