Shopify’s President Advocates for De Minimis Policy to Support Small Businesses
Harley Finkelstein, the president of Shopify, has voiced his support for the de minimis policy, emphasizing its importance for small businesses engaged in cross-border trade. The de minimis provision, also known as Section 321 of U.S. customs law, allows for the duty-free shipment of items valued at less than $800. This policy has been crucial for e-commerce businesses, particularly small entrepreneurs, as it helps reduce costs and simplify international trade. Finkelstein made these remarks during Shopify’s fourth-quarter earnings call, where he highlighted the challenges posed by the elimination of this provision and the need for streamlined customs processes.
Trump Administration’s Move to Repeal De Minimis and Its Impact on E-commerce
In early February, President Donald Trump issued an executive order that effectively ended the de minimis exemption, causing widespread concern among e-commerce businesses. The repeal of this provision meant that low-value shipments would no longer be exempt from duties, increasing costs for both businesses and consumers. Many Shopify merchants, who rely heavily on cross-border trade, were forced to adapt their supply chains to accommodate the new regulations. However, after significant backlash, Trump paused the repeal on February 7, giving U.S. Customs and Border Protection more time to implement processes for collecting duties on low-value packages. Additionally, tariffs on Canadian and Mexican goods, which were initially announced on February 1, were postponed for 30 days.
Shopify’s Proactive Response to the De Minimis Repeal
In response to the uncertainty surrounding the de minimis provision, Shopify took proactive steps to support its merchants. Finkelstein announced that the company had developed new tools enabling merchants to display and collect duties at checkout. This feature helps streamline the payment process for buyers and ensures compliance with customs regulations. Additionally, Shopify introduced new filters on its Shop app, allowing customers to shop from brands in their home country, further simplifying the cross-border shopping experience. These measures demonstrate Shopify’s commitment to empowering merchants and ensuring they can continue to thrive despite regulatory challenges.
The Importance of De Minimis for Entrepreneurs and Small Businesses
Finkelstein underscored the significance of protections like de minimis for small businesses, stating that they are "crucial for small businesses that engage in trade." By exempting low-value shipments from taxes and duties, the de minimis provision helps reduce costs and enables entrepreneurs to compete on a larger scale. Finkelstein emphasized that tariffs and trade barriers disproportionately affect small businesses, which are often the backbone of local economies. He called on governments to simplify customs processes and improve digital duty collection rather than eliminating policies like de minimis.
Shopify’s Commitment to Empowering Entrepreneurs
Finkelstein’s comments highlighted Shopify’s broader mission of protecting and empowering entrepreneurs, particularly small businesses and underdogs in the e-commerce space. He noted that "tariffs impact real entrepreneurs that are carving out livelihoods for themselves," and reiterated Shopify’s commitment to helping these businesses navigate challenges. By building tools to simplify duty collection and ensuring compliance with regulations, Shopify continues to demonstrate its dedication to supporting merchants in an increasingly complex global trade environment.
Shopify’s Growth and Financial Performance
Despite the challenges posed by trade policies, Shopify reported strong financial performance for the fourth quarter and fiscal year 2024. The company saw a 31% year-over-year revenue growth for the fourth quarter and a 26% increase for the full fiscal year. Additionally, Shopify’s annual gross merchandise volume (GMV) reached nearly $300 billion, reflecting the total dollar value of orders transacted through its platform. These figures underscore Shopify’s resilience and its ability to adapt to changing market conditions while continuing to empower millions of entrepreneurs and small businesses worldwide.
