Tariff loophole fuelling Canadian warehouse sector

Tariffs drive up prices for businesses, but some companies are finding a creative loophole to avoid some US tariffs. When a company imports a tariffed good, it pays a tariff. But it doesn’t pay a tariff if the goods are only passing through on the way to a final destination. This creates an incentive for US companies to store inventory in Canada. They can park products here until they sell them, and only pay tariffs on goods that are actually bound for the US market. “If this continues, Canada could become a secondary logistics hub Prof. Saibal Ray told Bloomberg. “Our biggest problem is that other than the US, every other market is quite distant. But if 80% goes to the US and 20% goes to other markets, you could actually make it work.”