Cross-border ecommerce between the US and Canada has not often been extra unsure than in 2025. Nonetheless, for American retailers, Canada stays a straightforward first step into worldwide gross sales.
Canadian customers purchase closely from U.S. websites. However this yr’s vacation procuring season is testing even skilled sellers. Tariffs, a postal strike, and shifting taxes have turned what needs to be a easy northern route right into a logistical puzzle.
Tariff Mud-Up
Many pundits have described current commerce relations as a struggle. Helaine Wealthy, the vice chairman of strategic gross sales and administration at ePost International, a global transport supplier, was extra tactful.
“The present administration actually took a have a look at what international locations are asking [American businesses] to pay once we’re transport into their international locations and what they’re charging as a premium on U.S. items,” mentioned Wealthy.
The consequence was a tariff for the US that upset North-South relations. The back-and-forth commerce negotiations included on-again, off-again reciprocal tariffs and surtaxes from the Canadian authorities — in some circumstances, as much as 25%.
At peaks within the U.S.-Canada dispute, ecommerce “cargo volumes dropped rapidly as tariffs rose and a few Canadian customers started avoiding U.S. manufacturers,” Wealthy mentioned.
But duties existed lengthy earlier than the current dust-up.
Canadian Duties
“Nothing is extra irritating than considering you paid for a product after which getting shocked on the door that it’s important to pay this, that, and the opposite obligation,” mentioned Wealthy.
Sadly, this can be a widespread incidence for Canadian customers shopping for from American ecommerce shops. Listed below are a number of examples of what Canada usually provides.
- Duties. Primarily based on the kind of items, their origin (together with whether or not they qualify below the US–Mexico–Canada free-trade settlement or different treaties), and classification (harmonized system code).
- GST. The Canadian items and providers tax applies to most imported items, calculated on the Canadian-dollar worth of products plus duties.
- PST or HST. Relying on the vacation spot province, the importer or client might also owe provincial gross sales tax (PST) or harmonized gross sales tax (HST), combining federal and provincial elements.
Postal Strike
The ultimate problem, past a unstable commerce atmosphere and duties due, is getting a bundle delivered in Canada.
Wealthy famous that the Canadian Union of Postal Employees is once more holding strikes through the vacation season, delaying most vacation shipments, because it did final yr.
Canada Publish is the nation’s main last-mile supply service. Thus sending shipments through the U.S. Postal Service or every other provider that companions with Canada Publish is a danger.
As an example, Walmart Market doesn’t permit Canada Publish or any affiliated providers. Sellers who attempt to circumvent Walmart’s restriction face suspension.
Alternative Nonetheless
Regardless of tariffs, taxes, and strikes, Canada stays a big development marketplace for U.S. ecommerce retailers.
Relying on the projection, complete Canadian ecommerce gross sales will vary from $40 billion USD to $43 billion in 2025. About 20% of these gross sales will go to American shops, making the Canadian market value round $8 billion for the yr. (In distinction, 2024 U.S. retail ecommerce gross sales had been roughly $1.2 trillion.)
Canada gives U.S. retailers geographic proximity, acquainted client conduct, and lesser competitors. Plus, practically all customers converse English.
If a U.S.-based on-line retailer desires to increase internationally, Canada is a good place to start out.
Promoting to Canada
Success requires researching three components: value competitiveness, duty-paid pricing, and provider contingencies.
Price
Earlier than advertising to Canadian customers, retailers ought to mannequin the full landed value — product, transport, duties, and GST/HST — to make sure every sale is worthwhile, in keeping with Wealthy at ePost International.
This step consists of figuring out and understanding tariffs or product restrictions. Canada forbids the import of some merchandise offered domestically in the US.
Backside line: Can a U.S. enterprise competitively promote its merchandise into Canada?
Responsibility-paid pricing
Responsibility-paid pricing is akin to free transport.
Delivery charges create friction, prompting customers to desert orders if too costly. Ditto for import duties.
Free transport gives take away that friction.
The equation is just like “supply obligation paid.” If paying Canadian duties for purchasers will increase gross sales quantity sufficient to offset the fee and generate extra revenue, do it.
Carriers
Lastly, no provider is an efficient selection when it’s experiencing a strike. Shipments will nearly definitely encounter delays.
Have a contingency plan that makes use of carriers not impacted by the present Canadian strikes.
