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Shopify Inc.’s president has come out in favour of a shipping exemption that U.S President Donald Trump’s trade feuds could end.
Harley Finkelstein threw his support Tuesday behind the de minimis exemption, which global businesses use to ship packages valued at less than $800 to the U.S. without having to pay duties.
The 25 per cent tariffs Trump has threatened to apply to Canadian goods in less than a month could erase the exemption. Trump already removed the exemption for goods moving to the U.S. from China earlier in the month, only to reinstate it when federal agencies became overwhelmed by the millions of small-value shipments they now had to process.
Merchants using software from Ottawa-based e-commerce company Shopify stand to be impacted by tariffs and changes to the exemption, which Finkelstein said helps the company reduce costs and compete on a large scale.
“Rather than eliminating de minimis, countries should really try to streamline these customs processes and improve digital duty collection to make things a lot easier,” he told analysts on a conference call.
His remarks come as North America and much of the globe has been plunged into a period of uncertainty because of Trump’s radical and rapid moves to change long-established trade policies.
The U.S. president signed an executive order on Monday that would apply 25 per cent tariffs to all steel and aluminum imports starting March 12. (Canada is the largest supplier of both metals to the country.)
By then, the month-long pause he put on plans to impose 25 per cent tariffs on all Canadian goods and a 10 per cent levy on Canadian energy will have run out.
“Tariffs impact real entrepreneurs that are carving out livelihoods for themselves,” Finkelstein said, noting he sees Shopify’s modus operandi as empowering every business, but especially those run by “the underdogs.”
“So as soon as we’ve seen anything whether it’s tariffs or de minimis, we usually get to work from a product perspective and we did that right away.”
Shopify now allows its merchants to display and collect duties during checkout.
A Shop app feature that helps users buy locally in several countries was configured in the early weeks of Shopify’s first quarter.
The company reported Tuesday a fourth-quarter net income of US$1.29 billion, up from US$657 million a year ago, as its revenue rose more than 30 per cent.
Shopify, which keeps its books in U.S. dollars, said the profit amounted to 99 cents US per diluted share for the quarter ended Dec. 31 compared with 51 cents US per diluted share a year ago.
Revenue totalled US$2.81 billion, up from US$2.14 billion in the last three months of 2023.
The increase includes a rise in both subscription and merchant solutions revenue, giving Shopify the confidence to predict its revenue will grow at a mid-twenties percentage rate on a year-over-year basis.
Shopify positioned the quarter’s results and its positive outlook as a reflection of some of the work it’s done over the last two years to refocus the business away from “side quests” CEO Tobi Lütke said had become a distraction.
Shopify laid off 20 per cent of its staff in May 2023 to help it more intensely focus on its main operations. In July 2022, it had also cut about 1,000 workers.
The company had 8,300 employees at the end of 2023.
Finkelstein said Shopify thinks it is at a point now where it can grow the business and its revenue while keeping its head count “fairly flat.”
“We like the size of Shopify, we like the shape of Shopify,” he said.
While Finkelstein spoke at length about how pleased he is with the state of Shopify and its performance, he avoided answering a question about how the company could use artificial intelligence for content moderation, given how it recently hosted a store from Ye.
The artist formerly known as Kanye West used Shopify software this week to sell T-shirts bearing a swastika, a symbol associated with antisemitism and Nazism.
Shopify users and some consumers took to social media Monday to urge the company and Finkelstein to remove the product, which was advertised by Ye during Sunday’s Super Bowl telecast.
Finkelstein, who is Jewish, has funded several Jewish organizations, hosts a podcast highlighting Jewish entrepreneurs and posts Friday videos on social media wishing people “Shabbat shalom,” a Jewish greeting.
Finkelstein sidestepped discussing the shirt by instead talking about the de minimis, which he had been asked about at the same time as AI and the Ye incident.
Shopify broke its silence on the matter Tuesday afternoon, when spokesperson Ben McConaghy confirmed the company was behind the store being taken offline.
“All merchants are responsible for following the rules of our platform,” he wrote in an email that did not explain which rules Ye may have broken.
“This merchant did not engage in authentic commerce practices and violated our terms so we removed them from Shopify.”
This report by The Canadian Press was first published Feb. 11, 2025.
Companies in this story: (TSX:SHOP)
Tara Deschamps, The Canadian Press
