The increase in US tariffs won’t just hit consumers, manufacturers, and retailers but also send shockwaves through the entire supply chain. Both American and Canadian trucking associations have expressed concerns over this increase. The US is Canada’s largest trading partner, with over 75% of exports heading south.
According to the new tariff rule, businesses that import goods from Canada will pay 10 to 25% tariffs. The same rules apply for Mexico and additional 10% apply for China. It’ll be rolled into action on February 14, 2025.
What Are US Tariffs, and Why Do They Matter?
A tariff is a tax on imported goods, designed to protect domestic industries by making foreign products more expensive. While it helps the purchase of local goods, unnecessarily high tariffs can kill local jobs, supply chain jobs, and make things more expensive for end consumers.
For Canadian truckers, tariffs mean fewer shipments, higher costs, and longer customs delays. If American businesses start sourcing goods locally instead of importing from Canada, there’s less work for truck drivers who rely on cross-border freight.
Increased Costs for Trucking Companies
The impact of tariffs isn’t just about fewer loads, operating costs also increase. Higher costs mean thinner margins, especially for smaller trucking businesses that can’t absorb the extra expenses as easily as large carriers.
If these costs get passed down to shippers, it could also make Canadian trucking less competitive in the US market. When the US imposes tariffs, Canada often responds with retaliatory duties on American goods. That means trucking companies not only see fewer exports heading south but also fewer US products coming into Canada.
For example, after the US targeted Canadian aluminum, Canada placed tariffs on US dairy, ketchup, and whiskey.
No De Minimis Treatment for Canada either
A de minimis threshold is a trade policy that allows low-value shipments to enter a country without being subject to tariffs or extensive customs processing. The US, for example, has a de minimis threshold of $800, meaning that any imports below this value can enter duty-free.
On the other hand, Canada’s de minimis threshold is significantly lower at $20.
Trump removed de minimis treatment for Canadian imports, which means more hassle for small shipments. If a business ships a low-value item to an American customer, it gets hit with the same tariffs and inspections as a high-value commercial load. Crossing the border is already slow due to inspections and paperwork, so small businesses and consumers can now expect more delays in receiving their orders.
What does this mean for commercial truckers?
Trucks handle 85% of freight moving between the U.S. and Mexico and 67% of shipments between the U.S. and Canada, supporting hundreds of thousands of trucking jobs across the country, according to ATA.
The trucking industry relies on speed, efficiency, and coordination. These new tariffs will reduce trade volume between Canada and the US, which means less jobs and fewer loads to haul.
Supply chain businesses can lessen their reliance on US trade by focusing more on domestic markets. With more Canadians choosing locally sourced products, demand for domestic freight is growing.
