U.S. Tariffs on Canada to Disrupt Logistics and Trade
The recent 25% tariff imposed by the U.S. on imports from Canada and Mexico is set to shake up the Canadian manufacturing and logistics industries. While manufacturers will bear the immediate brunt, logistics services will experience a delayed but significant impact, according to Cole Zhang, general manager of TC International Logistics in Vancouver.
"The logistics sector won't feel the effects right away, but the consequences will unfold in three key areas," Zhang explained in an interview with China Global Television Network (CGTN). "The first and most affected sector will be trucking companies that handle cargo movement between the U.S. and Canada. They depend on high trade volumes, which will decline due to these tariffs."
Another major disruption comes from a U.S. executive order suspending the $800 de minimis exemption for small package shipments. This policy change removes tax-free benefits for low-value goods, significantly impacting e-commerce and small businesses relying on cross-border trade.
Air freight services are also expected to feel the strain. "A decline in travel between the U.S. and Canada will lead to fewer flights, reducing cargo capacity for air freight businesses," Zhang added.
To counteract these challenges, Canadian businesses are already looking for alternative suppliers outside North America, particularly in the automotive and electronics industries. Zhang emphasized that logistics firms must adapt by diversifying trade lanes and strengthening partnerships with countries such as Japan, South Korea, and Mexico.
As Canadian companies pivot away from U.S. suppliers, the landscape of North American trade is set for a major shift. Logistics firms will need to innovate and expand their networks to navigate the evolving market.