- President Donald Trump claimed Tuesday that Canadians are smuggling goods across the border from the US to avoid high Canadian tariffs.
- Trump also claimed Canadians are scuffing up shoes in the US to disguise the goods before taking them home.
- Tariff data shows that the US and Canada charge roughly the same tariffs on imported shoes.
President Donald Trump on Tuesday claimed that Canada’s tariffs are so high that its citizens are smuggling goods en masse from the US to avoid the import fees.
“There was a story two days ago, in a major newspaper, talking about people living in Canada, coming into the United States, and smuggling things back into Canada because the tariffs are so massive,” Trump said, apparently referring to an op-ed in the New York Post. “The tariffs to get common items back into Canada are so high that they have to smuggle them in. They buy shoes, then they wear them. They scuff them up. They make them sound old or look old.”
The comments came as Trump tries to justify an escalating trade battle with Canada over new steel and aluminium tariffs from the Trump administration. In this case, however, Trump appears to have missed the mark. Based on tariff data, the US and Canada aren’t too far off in their treatment of goods – including shoes.
According to the International Trade Centre, a dual project of the United Nations and World Trade Organisation:
- Canada applies an average tariff rate of 13.12% on imported shoes.
- The US applies an average tariff rate of 11.86%.
- So, the average tariff rate on foreign shoes going into Canada is just slightly higher than shoes going into the US.
But looking at just trade between the two countries, the picture is even more equitable.
- No tariffs are applied on footwear moving between the two countries if they are made in either country, due to the North American Free Trade Agreement, or NAFTA.
- Additionally, members of the European Union and other Canadian allies also enjoy tariff-free shoe imports.
Even beyond shoes, average tariff rates in Canada and the US are not too far off. According to the WTO, the average applied tariff rate for goods coming into the US was 3.5% in 2016, compared to 4.1% for Canada.
This doesn’t necessarily mean that someone going across the border from the US into Canada won’t pay anything. Provincial taxes and fees that could apply to the movement of goods across the border and certain goods are still subject to tariffs, despite NAFTA.
Also, goods made in other countries but bought in the US have tariffs assessed based on their home country rather than the US rate. For instance, a Chinese-made TV bought in the US and brought across the Canadian border would be assessed a tariff as if it came from China rather than the US. But a US-made pair of shoes would get the NAFTA rate.
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