Priyanka Tiwari
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Self-employed merchants partnering with Amazon or Walmart are now preferring to shift their China-sourced goods into warehouses across Canada to bypass hefty US tariffs. This strategy makes use of Canada’s bonded warehouse system and programs for duty relief so that sellers can keep stock close to the US border without having to pay duties right away.
The strategy has been very helpful since the US tariff on Chinese imports, following the Trump trade war, have escalated to about 145% s, With many regions considering Canada as a safe have and ideal region to access new markets without losing profits, sellers and logistics firms are seeing Canada as a buffer zone.
“It’s a waiting game right now and we are setup to sit it this out,” said a large third party seller representative.
Why Canada is the Preferred Seller Choice
“There’s a need to fulfill exports goals within a 4-year window.” Requiring goods to be stored without paying duties granted Canada’s friendly trade zones, as well as, the Canadian border which is then re-exported is smart. A reimbursement from tariffs based on mount of issued Canada’s trade is also helpful if the border is deemed to be crossed within the later 4-year period.”
As stated by Dean Wood, CEO of BorderWorx Logistics, Although storing in Canada increases the container price by $500-600, the price offered is cheaper than the whole US border tariffs. Retailers feel no loss now as before the US border fee costs were.
Logistics Data Shows a Shift
The trends are being supported by freight data. A logistics company, Flexport, recently recorded a 50% rise in shipments from China to Canada over the previous week. Still, the company cautions this reconsidered route may not always yield a favorable outcome, particularly if the cargo in question must still enter the US under the existing tariffs.
"With ‘added expenses’ being tagged ontop of tariffs for mandatory payments, you’re just going to have to pay anyway,” is what Nathan Strang, Flexport's director of ocean freight, said.
Sourcing Beyond China
Although Walmart and Amazon have not issued direct statements, both have urged them to consider shifting the production to Vietnam and India. However, relocation of production is a solution that will take time, and numerous sellers are still managing shipments that are already in transit from China by sea.
Canadian stores readily accept goods from American vendors but American vendors readily ship their products to prep in advance for the holiday shopping season – and Canadian warehouses and facilities, due to limited bonded warehouse space in US, become an ideal solution.
A Calculated Gamble
This permits a US policy conditioned midterm trade softening to become the primary objective of why unsold stock piles are a near guaranteed revenue stream for this time period.
“That still remains a trust the US administration if' one executive revealed.
Currently, e-commerce sellers in Canada are utilizing real estate and waiting as primary strategies to weather the current stage of the US-China tariff war.
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