Potential Imports from Mexico to Canada Might Face Tariffs.
Finding your way around transshipment duties:
Curious about the customs fees for Canadian goods coming from Mexico via the U.S? Let's delve into it!
Asked this question, Ari Van Assche, HEC Montreal's international affairs professor, responded that there are no U.S duties for goods merely passing through the country—these are known as transshipment duties. Many products we consume in Quebec travel through New York or other U.S cities, only to be trucked off to Quebec, escaping American customs fees. Van Assche added that these products will only be subject to Canadian customs (if any) upon reaching the destination.
But, here's a catch. If a product undergoes a slight modification during its transit through the U.S, it would be deemed "consumed" there, triggering U.S customs fees. Van Assche highlighted that American authorities are vigilant about this and use various means like extensive documentation checks and separate sectors at transit sites to prevent any improper dealings. It's worth noting that evading controls comes with significant consequences, so it's a rare occurrence.
So, what does this mean for Canadian consumers? Van Assche summarizes, "As soon as there's a customs duty, it's a tax that increases the cost of things coming from the U.S." It's not just about the money—Canadian folks prioritize quality over price. This is why tariffs are always costly, as we have to either pay more or compromise on the quality of the products we import.
Don't forget, our Quebec homegrown products are always the preference! Van Assche recalled how Quebec products coming into stores are generally superior to imports, especially for agricultural products.
Lastly, when it comes to counter-tariffs, Van Assche expressed political challenges with sanctions but agreed they can pressure the U.S to remove their own tariffs. In fact, the Trump administration's recent prodding to dismantle Google's ad business emphasizes the importance of addressing these monopolistic businesses in the tech world.
On another note, it's snowing up to 40 cm in Quebec starting Wednesday evening, so be cautious when traveling on Thursday! Stay safe and happy reading!
References:
- Transshipment Duties: Rules and Regulations https://www.customs.gov/business/importing-products/transshipping-goods
- Understanding Transshipment Duties: Penalties for Non-Compliance https://www.cbp.gov/trade/basic-import-export/transshipment-goods-us-borders
- French manufacturers might be tempted to circumvent U.S tariffs on their products by utilizing transshipment through Canada, hoping to avoid customs fees.
- The finance industry closely monitors changes in tariffs and transshipment policies, as these can significantly impact international trade and investment.
- In some instances, Canadian businesses might face higher costs due to weather-related disruptions in the industry, which could translate to increased prices for goods subject to transshipment duties.
- Evading customs documentation checks during transshipment can lead to severe penalties, posing a risk not only to simple consumers but also to companies involved in such improper dealings in the U.S or Canada.
