British Columbia

Canadian retailers worry as Trump eyes duty-free threshold increase in NAFTA talks

The U.S. is calling for the so-called de minimis threshold to be increased from $20 Cdn to a "value comparable" to its $800 US limit, ahead of NAFTA renegotiation.

U.S. administration threshold raised from $20 Cdn to 'value comparable' to its $800 US limit

The administration of U.S. President Donald Trump, seen here with Prime Minister Justin Trudeau in February, has released its goals for a new North American Free Trade Agreement including a higher threshold for duty-free goods. (Sean Kilpatrick/Canadian Press)

The CEO of Harry Rosen Inc. says it would be a catastrophe for Canadian retailers if Ottawa gave in to U.S. demands to raise the value of goods American stores can send to Canada tax and duty free.

The U.S. is calling for the so-called de minimis threshold to be increased from $20 Cdn to a "value comparable" to its $800 US limit. The request is one of the American administration's objectives for the renegotiation of the North American Free Trade Agreement.

Larry Rosen says it would create a huge disadvantage for Canadian retailers, who must charge taxes and whose goods would become comparatively more expensive as a result.

He says it would be a boon for U.S. border towns, like Buffalo, as Canadian retailers including Harry Rosen would move a chunk of their businesses, like warehouses, south of the border.

Canada's de minimis threshold has remained the same since 1985 but is a hotly debated topic with some lobbying government to increase the figure, while others staunchly oppose a change.

The Retail Council of Canada has advocated against raising the amount, saying even a small increase could lead to job losses.

Canadians make millions of same-day road trips to the U.S. for cross-border shopping each year, though the practice tends to decline when the loonie is low. (REUTERS/Mark Blinch )

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