Air Cargo Quarterly
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Canada eliminates tariff on baby clothes and sports equipment
In a move that could have broad appeal for U.S. retailers, the Canadian government will no longer impose tariffs on imported baby clothes and selected sports equipment. The tariff elimination comes in response to complaints from Canadian consumers about the high cost of consumer goods in Canada, especially when compared with identical items sold in the United States. Removal of the tariffs levels the playing field and presents an opportunity for U.S. businesses to take advantage of Canada’s growing e-commerce market.
“Elimination of these tariffs, which added as much as 18 percent to the cost of baby clothes and sporting goods, is yet another reason why Canada holds so much potential for U.S. businesses,” said John T. Costanzo, president of Purolator International, a leading provider of logistics and delivery services for shipments traveling between the U.S. and Canada.
“Canada’s favorable economic climate, strong dollar and pro-trade policies already provide many excellent incentives for U.S. businesses interested in joining the export ranks,” Costanzo added.
Currently, more than $1.6 billion in goods cross the U.S./Canadian border each day, and total trade for 2012 topped $600 billion. Internet sales, particularly purchases by Canadian consumers, have been a growing component of cross border traffic. Canadian e-commerce is expected to enjoy a double-digit rate of growth through 2016, outpacing the growth rate in the United States. Canadian e-commerce sales exceeded U.S. $21.45 billion last year, with sales expected to top $34.7 billion by 2016. And, of particular interest to U.S. retailers, more than 60 percent of Canadian consumers say they have made online purchases from U.S. retailers.
A key factor to success in the Canadian market is having a logistics and delivery plan in place to ensure on time delivery. Canadian consumers expect the same levels of service and on-time delivery as U.S. consumers, which means it is essential to partner with a logistics provider with expertise in the Canadian market.
Purolator’s recently launched service, PuroPost™ addresses the specific needs of e-commerce businesses. PuroPost offers guaranteed service to Canada, at a fraction of the cost of similar products offered by its competitors.
Canada’s decision to eliminate tariffs on baby clothes and sporting equipment is considered a “test” by government officials, who want to see if the end result is a noticeable reduction in consumer prices. If successful, the tariff rollback may be extended to additional consumer products, presenting additional opportunities for U.S. retailers.
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