Etsy Sellers Face New Challenges with Tariffs
Meta: New tariffs and the end of a tax exemption are challenging Etsy Canadian sellers. The end of the de minimis rule has led to higher costs, complex paperwork, and major uncertainty.
Tariffs Hit Small Businesses on Etsy
The American vision, the idea that hard work can lead to a prosperous life, is often embodied in small business ownership. For countless individuals, especially women, this dream has found a home on Etsy, a platform where creativity and passion can be transformed into a career. Nonetheless, a wave of new trade policies, specifically the end of a long-standing tax exemption, is now jeopardizing this very dream for thousands of small business owners across the globe.
The End of an Era: De Minimis Exemption Gone
On August 29, 2025, the Trump administration completed a century-old rule known as the de minimis exemption. This rule, which allowed imports treasured at below $800 to enter the U.S. without tariffs or duties, was the groundwork of many small e-commerce businesses. Its removal has caused a ripple effect, forcing sellers to navigate a complex and costly new trade landscape.
For many Etsy Canadian sellers, the U.S. was a vital market, a virtual “extension of our domestic market,” as one seller put it. But with the end of the exemption, they are now facing a new reality of higher costs and increased paperwork.
- Higher Costs: Sellers like Kellie Abernethy who creates and sells handmade jewelry, are now pointing toward tariffs as high as 30% on materials sourced from China. This is a consequential blow to her business, which started in March 2020 after a personal hardship. Her prices range from nearby $30 to $150. For her to absorb this cost is simply not viable.
- Logistical Nightmares: To avoid these high tariffs, sellers in Canada are attempting to use the U.S.-Mexico-Canada Agreement (USMCA) to get exemptions. Nonetheless, as Doris Kochanek, a woodworker from Ottawa, explains, the paperwork is a “nightmare.” Cataloging the origin of all resources is a time-consuming step, which is nearly unworkable for items like yarn or fabric that are often not manufactured in North America.
- Uncertainty: The constant back-and-forth on tariff policies with announcements, delays, and court decisions has created a state of fear and anxiety. A federal appeals court ruled on August 29 that some of Trump’s tariffs were illegal, but the decision will not be applied until mid-October, leaving sellers in pending and unable to plan for the future.
The Impact on Women-Owned Businesses
These changes are exceptionally hard on women-owned businesses, which dream up around 80% of Etsy’s sellers. Women already face significant challenges, including limited access to capital and loans. A survey by the software company Gusto found that 70% of men use private capital to finance their businesses, compared to just 30% of women. With these new tariffs, the cost of entry and sustainability for women-owned businesses has only increased.
As Carley Zuercher, an Etsy seller and business consultant, notes, many of her clients are mothers who turned to Etsy for the flexibility it offered. Now, adaptability is endangered by the need to oversee complex trade guidelines, policies, and a constantly changing environment. She points out that purchasing domestically is not every time an easy solution. American-made goods are often costly and may not have the same quality or uniqueness as compared to multinational counterparts. This forces sellers to spend more time on new product photos, marketing, and communication, a heavy burden for those already stabilizing family and work.
This is not just a challenge for Etsy vendors in Canada or the U.S. The new policies are having an international impact. Lauren Keating, a Manchester-based Etsy seller and coach, remarks that sellers in the UK, where a 10% tariff rate is now in effect, are so swamped that many are choosing to stop selling to the U.S. altogether. They are troubled about delays at customs, unexpected bills for customers, and the hidden negative reviews that could damage their business.
A New Reality for Small Business Owners
The permanent effects of these trade policies are a major concern. Experts, like former Etsy seller and marketing expert Nicole Arnett Sanders, warn that as prices for handmade goods go up, consumers might turn to cheaper, mass-produced alternatives. This would undermine an entire sector of creative entrepreneurs that women-owned businesses have come to dominate.
In a world where small business ownership has become a vital path for women seeking financial independence and flexibility, these tariffs feel like a step backward. They were intended to bolster American companies, but in practice, they are putting small business owners the very heart of the economy at risk. The future remains uncertain, as the legal challenges to the tariffs make their permanence unclear.
The Etsy stock price and the success of many of its highest sellers on Etsy depend on an open and accessible global marketplace. As the rules change, everyone, from sellers to consumers, will be affected.
For more updates on this developing story, stay tuned to The Urban Magazine.
