Businesses shift to storing goods in Canada to avoid US taxes

Port of Vancouver in British Columbia, Canada. Photo: THX/TTXVN

The move was made to avoid tariffs and in the hope that the escalating trade war between the US and China will eventually find a solution.

However, this approach risks flooding the Canadian market with cheap goods, putting local businesses at risk and exacerbating competition for already scarce storage space.

According to a report by Flexport, a global logistics coordination platform, the number of goods from China to Canada recorded a 50% spike in just one week in mid-April 2025.

Customs brokers and industry experts have also seen a significant increase in consumer packaged goods, chemical and automotive companies flocking to Canada to stockpile goods. Even third-party suppliers like Amazon and Walmart are showing signs of increasing storage in the country.

Their common strategy is to store goods in Canadian bonded warehouses, facilities that allow imports to be stored without being immediately subject to tariffs. All in the hope that the Trump administration will soon reduce the high tariffs, which are currently as high as 145%.

Michael Kotendzhi, CEO of 18 Wheels Warehousing & Trucking in British Columbia, commented that inquiries are increasing by the day, with many businesses constantly reaching out to inquire about the company's bonded warehouse services.

Steve Bozicevic, CEO of A&A Customs Brokers in Toronto, said he has received calls from five companies in recent days looking into the rerouting option, including three to Mexico and two to Canada. Bozicevic said there are many import-export consultants in the U.S. who believe tariffs will come down soon, and they are advising their clients accordingly.

Clayton Castelino, president of Orbit Brokers in Mississauga, also sees interest from clients in these options, but he generally advises them not to act on them. He says a resolution to trade tensions south of the border should not be expected until negotiations on the United States-Mexico-Canada Agreement (USMCA) reopen next year, meaning businesses may have to look for alternative markets for their goods.

Mr. Castelino noted that the cost of storing goods in a bonded warehouse for a period of time is often higher than the cost of paying the tariffs. As a result, businesses may choose to sell their goods to the Canadian market at a lower price, rather than holding them in storage while waiting for the tariffs to be reduced or eliminated. Currently, storage costs range from $200 to $250 per day per container.

University of Waterloo logistics professor Jim Bookbinder says storage costs could get even higher as Canadian operators struggle to meet unprecedented demand for storage space across the country.

Even traditional warehouses — which don’t benefit from the tariff deferral — are seeing increased business from customers relocating to Canada to wait out the impact of tariffs. Lauren D’Amico, president of Toronto-based 3D Warehousing & Logistics, said that 38% of their new inquiries in April 2025 were related to the issue.

Professor Bookbinder noted that for seasonal items like clothing, sellers are likely to keep inventory because they don’t lose value and have the potential to generate high sales in the future. However, if the U.S. doesn’t change its overall tariff policy, many businesses with inventory in Canada will be forced to sell at a discount to the Canadian market. This means lower prices, and the diversion of products could pose a threat to Canadian manufacturers.

Mr. Castelino noted that one of the reasons the US imposes additional tariffs on foreign goods is because they are priced so low that they pose a threat to US manufacturing. When these goods are diverted to the Canadian market, they pose a threat to Canadian manufacturing.

According to VNA

Source: https://doanhnghiepvn.vn/quoc-te/doanh-nghiep-chuyen-huong-cat-tru-hang-tai-canada-de-tranh-thue-my/20250505082102958