Amazon and Walmart sellers stockpile goods in Canada to dodge Trump’s tariffs on China

Amazon and Walmart sellers stockpile goods in Canada

Independent sellers on Amazon and Walmart are increasingly moving their China-made goods into Canadian warehouses in a strategic attempt to avoid sky-high US tariffs imposed under President Donald Trump. The workaround, which involves storing inventory outside the US while waiting for potential tariff relief, is gaining traction among third-party vendors and even suppliers to major brands like Disney, the Financial Times reported.

Triggered by Trump’s sweeping trade war with China — which now imposes tariffs as high as 145% on a wide range of imports — the shift is being seen as a temporary but necessary move to preserve profit margins and avoid US duty payments while keeping inventory close to their largest market.

“This is not going to last forever,” said a senior executive at a major Amazon and Walmart third-party seller. “We’re prepared to wait this out.”

Canada becomes a tariff-free holding zone

Sellers are using Canada’s trade-friendly zones, which include bonded warehouses and duty-relief programs, to avoid paying tariffs upfront. Goods stored in these zones can be re-exported — including to the US — without incurring Canadian duties, and some programmes allow for relief or reimbursement if items are exported within four years.

Though storing goods in Canada adds an estimated $500–$600 per shipping container, vendors view it as a manageable cost compared to the steep US tariffs.

Dean Wood, chief executive of BorderWorx Logistics, which handles cross-border warehousing, said some retailers were absorbing the added Canadian warehousing costs because they are “still cheaper than paying the current rate of US tariffs.”

Logistics companies see early signs of a trend

The workaround is beginning to show in logistics data. U.S.-based freight group Flexport reported a 50% increase in shipments from China to Canada last week, indicating a growing number of sellers are testing the tactic. Flexport’s ocean freight director Nathan Strang warned that while the approach may pay off if tariffs drop, it could also backfire if the goods still need to be imported into the US with tariffs intact.

“It could wind up being an added expense on top of a tariff that you’re going to have to pay anyway,” Strang said.

Retailers race to find alternative manufacturing hubs

While Amazon and Walmart declined to comment, both companies have long been encouraging suppliers to move manufacturing out of China — a process that has accelerated since the Trump administration began targeting Chinese imports. Vendors are exploring alternative sourcing in Vietnam, India and other lower-tariff countries, but shifting production lines remains a years-long endeavour.

In the meantime, sellers are stuck with inventory already en route from China and are under pressure to prepare for peak holiday sales later this year.

Bonded warehouse space in the US, where goods can also be stored duty-free for up to five years, is in short supply. As a result, Canada has become a more viable buffer zone — especially for sellers betting that the White House may soften its stance before year-end.

A costly gamble to outlast tariffs

With the cost of stashing goods in Canada still significantly lower than absorbing full US tariff rates, many sellers see the temporary workaround as a worthwhile risk. But it remains a gamble.

“If we trust the US administration… that’s still a big if,” said one executive. For now, sellers are banking on patience — and a little Canadian real estate — to ride out the trade war’s latest chapter.