Canada-U.S. Blog Trade Lawyers Cyndee Todgham Cherniak and Susan K. Ross

How does the Canada-US trade war affect cross-border shoppers?

Posted in Canada's Federal Government, Countermeasures, Customs Law, GST/HST, tariffs

On July 1, 2018, Canada imposed countermeasures (that is, 10% duties) on a number of U.S. origin goods.  These new duties will apply to goods that are purchased by Canadians who shop in the United States.  Canadian cross border shoppers may be asked more questions at the Canada Border Services Agency (“CBSA”) Primary Inspection Booth and may have to go to the Secondary Inspection Area to undergo a Secondary Examination or pay the cashier.  This will add time to a Canadian cross border shoppers return trip to Canada.

What U.S. Origin Goods Are Subject to a 10% Tariff?

Canadian cross border shoppers are likely to purchase groceries or consumer goods. We have prepared a handy cheat sheet (in alphabetical order) of the goods that Canadian cross border shoppers might buy in the United States.  The following goods (and potentially similar goods that are classified under the same H.S. code) will be subject to the 10% tariff:

Adhesives Aerated Water Aluminum Doors, Windows and Frames Aluminum Kitchen or Household Articles Aluminum Nails
Aluminum Scouring Pads Aluminum Screws Aluminum Staples Aluminum Tacks Aluminum Washers
Ball Point Pens BBQ Sauce Bedding Bobbins Bourbon
Broth Candles Candy – Chocolate Bars or Slabs (filled) Candy – Chocolate Bars or Slabs (not filled) Candy – Licorice
Cast Iron Grills Coffee – Roasted – not decaffeinated Comforters Confectionaries Cooking Chambers
Cucumbers Dishwashers Dishwasher Detergent Dryers Facial Cleansers
Facial Tissues Freezers Fungicides Gherkins Glue
Greeting Cards Face Cleaners Felt Tipped Pens Hair Lacquers Handkerchiefs
Herbicides Incense Inflatable Boats Insecticides Kitchenware
Laminated Wood Lawn Mowers Maple Sugar Maple Syrup Markers
Mattresses Mayonnaise Mineral Water Meat-Beef Meat-Spent Fowl
Mixed Condiments Mixed Seasonings Motor Boats Nail Polish Nail Polish Remover
Nail Decorations Nail Cuticle Creams Orange Juice (not frozen) Organic surface-active products and preparations for washing the skin Outboard Motor Boats
Ovens Paper Paperboard Pickles Pillows
Pizza Plastic bags and sacks Plastic household articles Plastic Hygienic
Articles
Plastic Toilet Articles
Playing Cards Pleasure Boats Plywood Plywood, consisting solely of sheets of wood (other than bamboo), each ply not exceeding 6 mm thickness; Other, with both outer plies of coniferous wood Postcards
Prepared Meals that contain Beef Prepared Meals that contain Chicken or Turkey Printed Cards Quiche Quilts
Ranges Razors Refrigerators Room Deodorizers Room Fresheners
Room Sprays Salad Dressing Sauces Seats with Wooden Frames Serviettes
Shaving Cream Shaving Lotion Sailboats Sleeping Bags Soap
Soya Sauce Spools Stoves Strawberry Jam Table Cloths
Tableware Tapers/Candles Tissue Paper Toilet Paper Tomato Ketchup
Tomato Sauces Upholstered Seats with a wooden frame Veneer Panels Washing Machines Water
Water – Flavoured Water – Sweetened Water Heaters Whiskey Yogurt

 

In addition, other aluminum goods are subject to a 10% tariff and steel products are subject to a 25% tariff.  The complete lists 1, 2 and 3 are posted by the Government of Canada.

Do Canadians have to pay the tariffs?

The answer is yes. Canadian consumers will have to pay the tariffs if they go shopping.  In a Canadian resident is outside Canada for less than 24 hours, they must report all goods purchased or acquired outside Canada and must pay all applicable duties and taxes.  There is no personal exemption limit (there used to be a limit of $50, but it has not been available for a while). So, if a Canadian resident buys $CDN 100 of U.S. origin chocolate, he/she should expect to pay tariffs of $10 and applicable GST/HST on $CDN 110 (the tariff included converted price).

A Canadian resident who is outside Canada for more than 24 hours and less than 48 hours cannot import alcohol under the personal exemption limit of $200.  This would mean the Canadian resident would have to pay duties of 10% on any whiskey or bourbon and all applicable GST/HST on the tariff included converted price.

If a Canadian resident who is outside Canada for more than 24 hours and less than 48 hours returns with more than $CDN worth of goods, full duties (including the countermeasures tariffs) and GST/HST/sales tax must be paid on all the goods.

Do Visitors to Canada have to pay the tariffs?

The answer is yes. A visitor to Canada must declare all goods that he/she importing that the visitor intends to consumer in Canada or leave in Canada (e.g., provide to a Canadian resident as a gift).  Gifts valued at $CDN 60 or less each may be brought into Canada duty free and tax free. Gifts worth more than $60 CDN are subject to duty on the excess amount. Alcoholic beverages, tobacco products and advertising materials do not qualify as gifts.

NEXUS

If a NEXUS Card holder fails to declare to the CBSA goods that are subject to the countermeasures tariffs, the CBSA may confiscate their NEXUS Card.

If you require more information, please contact Cyndee Todgham Cherniak at 416-307-4168 or at cyndee@lexsage.com.