US tariff update
There's a lot of concern right now about the US "tariff" on shipments from Canada. To briefly summarize: for orders from this Web storefront shipped to customers in the USA, assembled modules should be duty-free, but SDIY kits will probably be subject to a high rate of duty, to be paid by the recipient of the package; and we will ship by courier, not post, at no additional charge.
I've updated my Terms of Service with specific notes for the USA. This entry goes into more detail on the rules and the news, for readers who find such things interesting. A lot of it is just what I already said in my email newsletter a couple days ago.
Current state of affairs
The United States currently (4 September 2025) enforces a blanket "tariff" (perhaps more properly called a duty) of 35% on imports from Canada to the USA. That means that in principle, unless other rules apply (but in many cases they do), 35% of the value of the package has to be paid to US Customs when a package from Canada crosses the border into the USA.
At present there is no exception for small packages. All commercial shipments of goods from Canada to the USA, no matter how small, are subject to the 35% duty rate. However, there is an exception for goods that are "originating goods" according to the United States-Canada-Mexico Agreement (USMCA), also known as CUSMA (same names in a different order).
I have determined that all North Coast Synthesis Ltd.'s assembled products offered in this Web storefront - that is, modules and cables - are "originating goods." When I ship these to the USA, I will ship them with a USMCA Certification of Origin document, which should allow them to pass the border duty-free. However, my kit products do not qualify as "originating goods" and those will likely be subject to the 35% duty.
The 35% duty has been ruled illegal by two US courts, but at the moment it is still being collected. The Trump Administration has asked for leave to appeal the lower-court decisions to the US Supreme Court, and collection of the duty is still going on pending the results of that request and probable appeal. It is unknown, if the Supreme Court should finally find that the duty really is illegal, whether persons who paid it while it was being collected will be able to obtain refunds.
US Customs now demands that foreign postal services should pre-pay the duty, presumably after collecting it from the sender when they accept the package. Many foreign postal services are simply refusing to carry packages to the USA at all, because of the impracticality of complying with that demand. Canada Post still accepts packages for the USA now, but it demands that the sender pay 35% (plus an additional service charge) on every package, including on USMCA-compliant "originating goods" which are exempt from the 35% duty.
The policy of North Coast Synthesis Ltd. is that I will not collect taxes or duties on behalf of a foreign government. That is why, for several years already, I don't make small shipments to the United Kingdom. It applies even more stongly in cases like this one where the extra charges do not actually apply, and are probably illegal under the foreign country's own laws anyway. My shipments remain Incoterms CPT, as they have always been for international destinations, meaning that the recipient is responsible for Customs charges. In order to maintain that, I am no longer using Canada Post for shipments to the USA, and will use courier services like UPS and DHL instead - as was already my policy for shipments to Germany, for other reasons.
If you buy items from North Coast Synthesis Ltd. for shipment to the USA, then when the package crosses the border, US Customs will assess whether any duties or taxes need to be paid. If so, the courier company will contact you to ask for payment of those charges, usually before they deliver the package. The Certification of Origin, for assembled products, should mean the 35% rate doesn't apply to those products, but I can't promise that US Customs will accept that document, nor that there might not be other kinds of charges (sales tax, in particular) appliable to a given order. You have to deal with US Customs and the carrier yourself in the event of any conflict - as has always been the case.
I will pay the extra cost of using courier shipping instead of post, as part of my longstanding "shipping included" policy. I will also attempt to choose a courier service that includes Customs "brokerage" as part of the service, even though that costs more, so that customers in the USA will likely only have to pay taxes and duties to their government, not also a fee to the courier. I will also pay the extra fee to attempt a weekend courier delivery, for customers who request that - the idea being to reduce the inconvenience of couriers' more limited delivery schedules.
Recent history
After some earlier announcements and suspensions, the blanket tariff went into effect at a rate of 25% on 4 March 2025, increasing to 35% starting 1 August 2025. On March 7 it was announced that goods complying with the existing CUSMA/USMCA treaty would be exempt, but at the time there was no clear path for small senders to really make use of that exemption.
The tariff on Canadian goods was not actually part of the April "Liberation Day" tariff package; it was a separate and earlier executive action specifically aimed at Canada. But both were purportedly made using emergency powers granted to the US President by the "International Emergency Economic Powers Act" (IEEPA).
The US Court of International Trade ruled on 28 May 2025 that the blanket duty on Canadian goods (and similar ones imposed on other countries) was not within the President's powers under IEEPA, and therefore illegal. However, the Court of Appeals for the Federal Circuit agreed to consider the matter, and stayed the ruling pending that consideration - so the duty kept being collected.
Until 28 August 2025, packages valued at less than US$800 were exempt from almost all Customs processing and charges, under what was called the de minimus exception. While that remained in place, the tariffs had little practical effect on packages from North Coast, which are usually below $800 anyway. Nonetheless, the uncertainty did basically kill my business in the USA, which prior to 2025 had been most of my business. Few customers want to risk it. I only shipped a couple of packages to the USA during this period - which, as far as I know, went through duty-free under the de minimus exemption.
Many countries around the world have a similar de minimus exemption. It comes from the theory that (bearing in mind duty rates are usually less than 5%) it would cost more to process the paperwork on a small package than the amount the duty is worth. But the USA's $800 threshold was unusually high - in most places, the limit is more like $20 to $200.
Anyway, the US administration removed the de minimus exemption starting 29 August 2025, for packages from all countries. (It had already been removed earlier, for packages from the People's Republic of China.) That was the big step from North Coast's point of view because it meant that for the first time, the 35% rate might actually be collected on our small shipments. It's also significant because it is a separate point from the legality of the 35% duty itself: even if the per-country duty is found to be illegal, that finding won't bring back de minimus, and any other duties, taxes, and so on, that may apply, will still apply to even the smallest packages.
For small businesses like mine, shipping to the USA, the loss of de minimus is really a bigger deal than the tariff rate, because international customers are extremely hesitant to buy anything that may arrive with "extra charges" owing, no matter the amount or exact nature of those extra charges. I see the same effect with customers in Europe, who strongly object to paying their local VAT rates on international orders even though those same taxes also apply (but are typically included invisibly in advertised prices) for domestic items they buy locally. It's the fact of having an "extra" charge at all that is the problem, and nothing except de minimus can really resolve that.
Also on 29 August 2025, the appeals court came back with its decision on the per-country tariffs, affirming the lower court's decision: that is, they said the lower court was right, the President does not actually have the power to put these per-country tariffs in place. As a Constitutional matter, it is Congress, not the executive branch, that can make decisions on trade; IEEPA is a delegation of some of that power to the President, but does not actually go so far as the current President attempted to push it. But this decision, too, is stayed until 14 October 2025, so that there can be an appeal to the US Supreme Court. And yesterday (3 September 2025) the administration did in fact file the paperwork asking the Supreme Court to take up that question.
After the loss of de minimus, combined with the demand by US Customs for foreign postal services to collect duties on behalf of the USA, many postal services around the world stopped accepting shipments addressed to the USA.
Background: HS tariff numbers
Goods sold internationally are classified according to "Harmonized System Tariff numbers" - often called "HS tariff numbers," sometimes also called "HST numbers" but that can be confused with registration numbers for the Harmonized Sales Tax, here in Canada.
In order to figure out the tariff status of an item, you need its HS tariff number. There are some links in the "Resources" section below for looking them up. It's usually a good idea, and sometimes required, to list the correct HS tariff number for each item on a Customs declaration. That reduces the chance that the Customs officers will misinterpret a verbal description and charge you a wildly incorrect rate.
For North Coast Synthesis Ltd., it happens that all the products in my Web storefront have the same number: "9209.94.8000." I can't promise that it will be so simple for other online businesses; in principle, every product may have a different number.
The breakdown of this number is:
- 92 Chapter 92, "musical instruments"
- 9209 "parts and accessories for musical instruments"
- 9209.94 "parts and accessories for instruments of heading 9207," where 9207 is basically "electric" or electronic musical instruments
- 9209.94.8000 accessories other than collapsible stands
That's according to the US version of the classification scheme, which is probably the right one for imports to the USA.
Assembled modules are exempt
The critical question for avoiding the per-country duty, now that de minimus no longer applies, is, "Is this item 'originating' according to USMCA?" For that we need to check the Rules of Origin, Chapter 4.
The relevant subsection is Article 4.2, item (b), which says that a good is "originating" if it is:
(b) produced entirely in the territory of one or more of the Parties using non- originating materials provided the good satisfies all applicable requirements of Annex 4-B (Product-Specific Rules of Origin)[.]
Then bearing in mind that our goods are all under tariff number 9209.94.8000, we can check Annex 4-B for Chapter 92, where it says (that the good becomes originating if there is):
92.09 A change to heading 92.09 from any other heading.
The parts that go into my assembled products are not specifically "parts and accessories for electric musical instruments" - they are just general electronic parts - until I make them something more specific by actually building an electric musical instrument accessory out of them. So that's a "change to heading 92.09" and it makes the product originaing.
It is interesting that for heading 92.09, in general, there is no minimum percentage of what the rules call "Regional Value Content"; the quote above is the entirety of what Annex 4-B has to say about this heading. So for these items I don't actually need to prove the percentages of cost or of "transaction value" that were added in Canada. It is enough simply that I'm doing a manufacturing process that changes the classification heading. In that respect it's actually a less onerous requirement than for some of the other treaties (with Europe, and with South Korea) where I've had to do a similar analysis.
Kits are probably not exempt
Kits are also under HS tariff number 9209.94.8000. However, there's another important bit in the Rules of Origin that affects them. Here are the first two sections of Article 4.17:
1. Except as provided in Annex 4-B (Product-Specific Rules of Origin), each Party shall provide that for a set classified as a result of the application of rule 3 of the General Rules for the Interpretation of the Harmonized System, the set is originating only if each good in the set is originating and both the set and the goods meet the other applicable requirements of this Chapter.
2. Notwithstanding paragraph 1, for a set classified as a result of the application of rule 3 of the General Rules for the Interpretation of the Harmonized System, the set is originating if the value of all the non-originating goods in the set does not exceed 10 percent of the value of the set.
I won't quote all of "rule 3 of the General Rules for etc.", but what it basically says is that if you've got a "set" or "kit" of parts where the parts themselves that have some other classification or a mixture of classifications, you can classify the set under a more specialized heading that applies to it as a whole.
That's important for my SDIY kits: each kit contains items with many different tariff numbers, such as metal film through-hole resistors (8533.21.0090), aluminum electrolytic capacitors smaller than 18mm (8532.22.0020), and small machine screws (7318.15.2010). But the kit as a whole becomes tariff number 9209.94.8000 when these items are selected, sorted, and packaged - indeed "produced" - into a product for the specific use of making a synthesizer module.
The point of Article 4.17 is that despite being classified under "heading 92.09" because of "rule 3," the "originating" status of the kit still depends on the status of the parts in it. Section 1 says all the parts have to be "originating" too (!). Then Section 2 says, well, okay, you can have originating status if at least 90% of the value of the kit is originating.
I could maybe reach the 60% origating value requirement that applies in some other cases, if I can count the (significant) cost of Canadian labour that goes into a kit. But 90% is pretty much completely impossible when so many of the parts in a kit come from places like Malaysia and Indonesia. Some parts are from Mexico, and those would probably count as originating because Mexico is a Party to this treaty too; but certainly not 90%.
So it seems pretty clear that if I'm reading this right, I can't claim "originating" status for my kit products.
What about an order that includes both?
If a single order for the USA includes one or more assembled modules (duty-free) and also one or more kits (subject to duty), then in principle, Customs should charge duty on the items for which it applies, and not on the items for which it doesn't apply.
I don't know how well that will work. I've seen in other cases where there were items with differing status in the same shipment, such as a repaired item returned under warranty along with a newly purchased item, that Custom agencies have sometimes been confused and processed the entire order under the higher rate.
So I'll handle these orders as seems best for the individual order. That might mean sending it all, with a Certification of Origin limited to just the items that really are USMCA "originating." That's what the Web shop is set to do by default: your downloadable invoice will be for the entire order, with the Certification of Origin limited to the appropriate line items. But depending on the numbers of different kinds of items involved, if I think the resulting shipping cost is reasonable I might also split such an order into two shipments and give them separate manually-generated invoices, to keep the different Customs statuses separate and reduce the possibility for confusion. I can't promise either way on this - it'll be specific to the situation. I'm not expecting it to come up very often.
Canada Post and courier shipping
As described above, Canada Post is now demanding a 35% payment in advance for commercial shipments exported to the USA. They've subcontracted to something called "Zonos" to actually collect the money, and as well as charging an extra fee of its own, Zonos doesn't appear to have made any provision at all for handing USMCA "originating goods" exemptions.
It's early days yet. Maybe if the tariff regime doesn't change even further, then once things settle down Zonos will create a system for processing Certifications of Origin, and Canada Post will again become a credible choice for commercial shipments to the USA. At the moment, though, and especially for my assembled products which should not be subject to duty at all, it seems I can't realistically use Canada Post.
I will use whatever I think best for each shipment, but at the moment, I think that for shipments to the USA, that is likely to end up being UPS, specifically the "Express Saver" service, resold through Netparcel. That costs more than Canada Post would, but Canada Post is not really an option now. Express Saver means that at least some level of Customs brokerage is included in the courier service, and paying for it that way is much cheaper than paying a separate charge for brokerage after Customs clearance has happened. The hope is that with assembled products there shouldn't be any border-related charges at all; and even for kit products subject to duty, the recipient should end up paying only the duty and not much, if any, in other charges.
It remains that the recipient does have to pay whatever border-related charges US Customs and the courier company may charge. International shipments are normally supposed to proceed according to standarized contracts called "Incoterms"; the one I've always used for North Coast Synthesis shupments is called Incoterms CPT, which basically says that I am responsible for delivering the goods to the carrier and paying the carrier to bring them to you, but then you are responsible for dealing with border formalities - usually by paying a broker to do so, which in turn will usually be the carrier or its brokerage department.
I think that's how it has to be with small-business international shipments. Only you, in your own country, can realistically deal with your local Customs agency. But I'm still going to do what I can to make this as easy a process as possible, within such limits as not collecting duty myself on behalf of the foreign government.
Courier shipping is in some ways better than postal shipping - usually faster, for one thing - but it's more expensive (which cuts further into my profits when I'm covering shipping out of my regular prices), and courier companies will usually only deliver during business hours. I've occasionally had customers request specifically postal shipping because the post office does a better job with holding packages at a convenient location for pickup when the recipient isn't home; unfortunately, in the current state of things, I don't think that "ship by post" is a request I can grant for packages addressed to the USA. One thing I can do is pass on a request to the courier company to deliver on a weekend, when someone may be more likely to be at home. Indicate this in the order notes if you want me to do this. They charge extra for it; I will cover the extra charge as necessary. But I can't promise that a courier company will really honour such a request. Sometimes they don't.
I have not yet actually sent any packages to the USA since the loss of de minimus. The above is based on what my shipping providers have told me, but it's possible than whenever I do have a package for the USA, I'll take it to the shipping provider and they'll demand an unexpected pre-payment of duty or something. In that case I'll have to deal with it somehow when it comes up.
What about buying through a dealer?
If you have a local dealer who stocks North Coast Synthesis products, then buying through them means you don't have to worry about border formalities yourself.
However, when the dealers place their wholesale orders with me to restock, they will end up having to pay whatever duties apply at the time (probably none on assembled products, and 35% on kits); from a Customs point of view there is no real difference between my shipping to a dealer or shipping to an individual customer, especially now that de minimus is gone. It seems like there's no plausible way dealers can afford to pay the duty except by marking up their prices on kits when they sell the kits on to retail customers; so except for maybe buying kits that were already in the USA before the tariffs hit, it's likely that you won't be able to get around the increased cost just by buying from a dealer.
For clarity, since this question has come up recently: I do not have price-limiting agreements in place with any dealers. Dealers are free to set their own prices; my MSRPs ("Manufacturer's Suggested Retail Prices") are not intended to include taxes or duties; and it's normal and expected for dealers to add in taxes and duties as necessary, at their own discretion, when they sell the products on.
Since assembled modules should be duty-free, buying assembled modules through a US dealer may work somewhat better.
Buying from a dealer may be valuable in other ways, of course. If your local dealer doesn't stock North Coast Synthesis products, I hope you'll encourage them to do so - but in fairness, right now is probably not a time at which US-based dealers are at all eager to bring in new Canadian products, precisely because of the difficulty of the international trade situation right now.
What about other Canadian companies?
Obviously, I'm not a lawyer and can't give legal advice to anybody, and even if I were a lawyer, I couldn't become responsible for the specific cases of people who weren't my clients, just by making general comments in a Web log entry addressed to nobody in particular. You need to retain a lawyer with the appropriate specific expertise, to give you an opinion on your company's individual circumstances.
Nonetheless, as a merchant active in this field and an expert on electronic commerce technology, I am properly qualified to comment on the technical aspects of implementing whatever policy you decide to implement, including such things as automatically generating the documentation, and interfacing to shipping systems, and you can contact me for consultation on those kinds of things.
To an educated layman's eye it seems like most of the same considerations that apply to my company, as described above, would also apply to others. Someone else "producing" synthesizer modules in Canada, if those modules end up classified under "Heading 92.09," would probably be able to claim USMCA originating status the same way I'm doing. And someone else with a kit product "classified as a result of the application of rule 3" would probably be facing the same "no more than 10% non-originating content" issue I'm facing, and thus not be able to claim USMCA originating status.
More generally, a Canadian company selling things other than synthesizer modules and kits to customers in the USA, would need to figure out the applicable Rules of Origin for their particular products. There are links in the Resources section below which may help with that.
Having determined that the products are "originating," the main thing to do to benefit from that status is to include a document called a "Certification of Origin" with the Customs declaration. The links below include information about what should be in the document, and some examples (including one in the format I'm using).
Multiple sources emphasize that there is no official form to fill out - you can create your own, if it contains the nine things that the rules require - but there are also fillable sample forms available from a number of sources.
You can make a specific Certification of Origin document for each shipment, which is what I'm doing, or you can make a "blanket" Certification covering specific SKUs for a period of up to one year, and then just include a copy of the blanket document with every shipment it covers.
In addition to the Certification, you need to have documentation of whatever facts you are claiming in order to support the claim of origination. For me, because I don't need to meet a specific percentage of Regional Value Content, that's relatively easy - I just need to be able to prove I really did produce the products, with the effect of changing the classification heading, in Canada. If I were claiming on the basis of percentage cost, however, I might need to have well-organized accounting records of how much I paid for all the things that went into the product, and which of those things were themselves of "Party" (Canada, US, or Mexican) origin.
What about shipments to Mexico?
I make very few shipments to Mexico and so far I haven't had problems with high duty rates being charged on them; Canada and Mexico are getting along pretty well with each other in the current trade situation.
Nonetheless, Mexico is a party to the relevant treaty, and as I understand it, a Certification of Origin of the same kind used for the USA should also serve to support a claim that "originating" Canadian goods, such as my assembled products, should be duty-free on import to Mexico. Since it's not really any extra work, I've set up my software to generate these documents for shipments to Mexico too, and we'll see how that goes.
Resources
Canada Border Services Agency Memorandum D11-5-17 on CUSMA/USMCA - source for the Rules of Origin (Chapter 4), Annex 4-B, etc.
General rules of interpretation (from CBSA, relevant for classifying kits under Article 4.17 of the Rules of origin).
HS tariff number information: from the Canada Border Services Agency (whole tariff) and Chapter 92 (musical instruments); and from the US International Trade Commission (searchable database).
CBSA page on what goes into a certification of origin. Note that page is technically for importing to Canada, but it says the same thing as several other pages around the Web for the certifications needed on import to the USA. Sample certification (PDF) as generated by our system.
Stallion Express Web log entry about CUSMA/USMCA compliance; includes a sample certification form somewhat different from mine, and practical suggestions. The usual disclaimers apply.
Local PDF mirrors of the US Court of International Trade and US Court of Appeals for the Federal Circuit decisions regarding legality of the tariffs.
◀ PREV North Coast Synthesis at Open Ears 2025
