Many Chinese exports bound for the U.S. have been rerouted to Canada to skirt tariffs as the trade war continues to escalate between the U.S. and many of its international partners.
This means Canadian consumers may soon have an abundance of discount goods as warehouse storage reaches its capacity.
As much as 50 per cent of consignments from China were diverted to Canada in mid-April as many industries look to stockpile their inventory north of the border instead of in the U.S.
Third-party sellers for companies such as Amazon and Walmart have also begun to hoard goods in Canada so that their items may be held in a country where they won’t face any immediate payment of duties.
The long term strategy of these companies is to hope that they will outlast the Trump administration’s tariffs, some of which are currently as high as 145 per cent.
The U.S. has long been the world’s largest consumer market, taking in roughly 15 per cent of global imports last year.
This was largely due to its previously low tariffs, which averaged around 3.3 per cent
Additionally, China is now importing record amounts of Canadian crude oil after cutting its purchases of U.S. oil by nearly 90 per cent.
The Vancouver port saw an unprecedented 7.3 million barrels shipped to China in March and that number is only likely to grow.
While China still primarily imports oil from the Middle East and Russia, Canadian oil provides a source of relatively cheap crude that is high in sulfur, which can be refined using some of China’s most-advanced equipment.