How to Minimise Your Ecommerce Tariff & Surtax Costs with Smarter Shipping & Fulfillment

In view of current tariffs and surtaxes, the OECD forecasts that Canada’s economy will grow by just 0.7% this year, while Mexico is expected to see a 1.3% contraction. Meanwhile, U.S. growth has been downgraded from 2.1% to 1.6%. From every angle, these are harsh economic times and tough conditions for ecommerce brands shipping from the US to Canada or Mexico and vice versa.

With rising cross-border costs, companies must be more strategic than ever in how they navigate logistics, pricing, and compliance. Despite the uncertainty, there are options for ecommerce companies to reduce the impact of the tariffs and surtaxes.

1. Leverage Cross-Border Warehousing and Sister Companies

An effective way for US ecommerce companies to minimise excessive cross-border costs is to establish a sister company (or entity) in Canada that imports goods at a transfer price from its US counterpart rather than at full retail value. In doing so, duties, taxes and surtaxes are applied to the lower transfer cost instead of the sale price, significantly reducing the tariff burden.

2. Move Fulfillment to the Country of Sale

For US businesses shipping high volumes to Canada, moving fulfillment operations close to your customers may significantly cut costs. By having goods on the ground in Canada, US businesses avoid surtaxes on the full sale price and instead pay duties and taxes on the cost of goods upon importation. This reduces import costs and is likely to improve customer satisfaction through faster, reliable final mile delivery.

3. Re-routing your Chinese-origin goods

For those US companies sourcing inventory from China, to sell to customers in Canada and around the world, you will want to avoid bringing inventory first to the US where tariffs will be payable. As a solution to this, consider shipping to your customers direct from China or establishing your fulfillment in Canada and shipping direct to customers in Canada. Both options mean you avoid paying US tariffs.

4. Consider Manufacturing Your Products in New Origin Countries

If you are manufacturing in the U.S., consider making your products in another country such as the UK, then ship them directly to customers in their destination country to avoid US tariffs and Canadian surtaxes.

5. Monitor and Optimize Tariff Classifications and Country of Origin

The current climate of retaliatory tariffs requires ecommerce companies to be on-top-of those products being targeted with tariffs and those that are not. What’s more, misclassified products can result in unnecessary duties and import fees. It is important to review your HS codes (Harmonized System codes) to ensure they are correctly categorized and to remain compliant. Check your products’ country of origin – if it is shipped from the US this doesn’t always mean it is manufactured in the US. If it isn’t US-made there are no surtaxes to pay. Working with a trade services expert on these details can help ensure your products are eligible for the lowest applicable duties.

6. Explore Trade Agreements and Duty Drawbacks

The United States-Mexico-Canada Agreement (USMCA) provides duty benefits for eligible products made in North America, but ongoing trade tensions have led to tariff adjustments that require careful monitoring. Ensuring your goods qualify under USMCA rules can eliminate duty costs entirely. Additionally, companies that import goods into Canada or the U.S. and later export them (e.g., returns) may be eligible for duty drawback programs that provide refunds on paid duties.

How Landmark Global Can Help

At Landmark Global, we have been trusted by our clients for over 20 years to enable their growth - no matter the economic conditions. Want to find out about our parcel delivery, fulfillment and in house trade services expertise? Reach out – we’re here to help.