Archive for the ‘Importing into Canada’ Category


 

Possible Trade War: U.S. and Canada

 

Canada, the U.S. and Mexico Flags NAFTA

On June 1, 2018, the U.S. committed to a 25% tariff on imports of steel and 10% tariff on aluminum, on the European Union, Canada and Mexico. The tariffs have triggered retaliatory tariffs on U.S. goods and heightened the chance of a trade war.

The U.S. steel industry will initially benefit from the tariff increase through decreased international competition, driving up the price of U.S. steel and therefore the profits. These profits can be reinvested into the steel industry by improving their technologies and potentially providing more job opportunities.

A potential downfall to the tariff increase is retaliatory measures from U.S. trade partners, as is the case with Canada. Canada has announced $16.6 billion in retaliatory tariffs. The Canadian tariffs will go into effect July 1, 2018, and cover a broad range of commodities. Some, mainly unfinished iron and steel products will be hit with a 25% tariff, while others including many consumer products will be hit with a 10% duty.

 

If history repeats itself, trade policy experts warn tariff increases could cause future harm. An example of this was in 2002, when the U.S. enacted a tariff of 8% to 30% on international steel. The increased tariffs set off a chain reaction with the European Union responding with tariffs of its own and a number of countries disputed the tariffs at the World Trade Organization. The WTO ruled the U.S. violated the international trade agreements, and opened the door for sanctions and retaliation. Retaliation by the EU cost many Americans their jobs, and in late 2003 the U.S. Government reversed the sanctions.

Canada’s Stance

The tariffs could cost the Canadian economy over $3 billion a year.  According to the Canadian Steel Producers Association, Canada is the largest supplier of steel and aluminum to the U.S.  Approximately 90% of Canada’s steel is exported to the U.S. The price of steel and aluminum is going to go up as a result of these tariffs and jobs will be lost in Canada. Steel production employs around 22,000 people in Canada concentrated mainly in Ontario. Canada exports around 84% of its aluminum to the U.S., which represents around 8,300 jobs in the aluminum sector with the majority being in Quebec.

Canadian consumers can expect to pay more for products imported from the U.S. that are largely made of steel and aluminum which could apply to anything from cars, refrigerators, canned sodas and beer.

International Stance

China, and the European Union have also responded negatively to the U.S. tariff increases. Brazil contributes 13%, followed by South Korea at 10%, and Mexico at 9%. The original target China only imports 2% of the U.S. steel imports.

Along with fighting the tariffs at the World Trade Organization, European officials have been preparing levies on an estimated $3 billion worth of imported American products in late June. In a joint statement, ministers from France and Germany said the countries would coordinate their response.

Steel and Aluminum Statistics

Below you can see a few interesting statistics on Canada-U.S. cross-border steel and aluminum trade.

  • In 2017, Canada exported nearly $17 billion of steel and aluminum products into the U.S. (Statistics Canada)
  • More than $14 billion of steel crossed the Canada-U.S. border in 2017 (Canadian Steel Producers Association)
  • Canada exported $11.1 billion of aluminum and aluminum articles to the U.S. in 2017 compared to $3.6 billion of imports from the U.S. (Statistics Canada)
  • Close to 45% of Canada’s steel production is exported to the U.S.  Predominantly to Michigan, Ohio, Illinois, and New York.
  • Over 50% of American steel exports go to Canada.
  • Canada sent more than $5.6 billion of primary aluminum exports to the U. S. in 2016. New York, Kentucky, Michigan and Pennsylvania are the top destinations.
  • Between 2000 and 2015, Canada’s share of world aluminum production fell from 10% to 5%. For the U.S. from 15% to 2.7%. While China’s increased from 11% to 55%.
  • U.S. aluminum production fell following the 2008 financial crisis and recession. It was up 6.9% in 2018 from 2017.
  • Canadian aluminum production is down 7.6% for the first two months of 2018 compared to the same time in 2017.

The Beginning of the End for NAFTA?

With the likelyhood of eliminating multilateral trade agreements in favor of bilateral trade agreements. In order to have control over your trade in these uncertain times, you must arm yourself with the knowledge of what your duty rates will be without NAFTA, alternative countries of origin for your imported goods and freight quotations on getting your goods from your new origin to the final destination.

You can talk with our trusted trade advisors to determine your rate of duty without NAFTA. Click here to get in contact with a trade advisory expert today.

Jan Brock | Author

 

 

 

 

 

 

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CBSA Releases 2018 Departmental Plan

CBSA Departmental Plan

The CBSA Departmental Plan for the next two years supports the Government of Canada’s effort to improve travel and trade facilitation. The departmental plan covers a number of initiatives specific to various modes. The trade initiatives are as follows:

Pre-clearance for Cargo

CBSA will continue to advance the development and expansion of the pre-clearance program for cargo. In 2018-19 CBSA will work with U.S. Customs and Border Protection (CBP) on the Bi-national Rail Cargo Pre-screening Pilot. This Pilot involves CBSA Border Services Officers (BSOs) pre-screening rail cargo by viewing x-ray images of northbound rail cars at Rouses Point, New York. BSOs working with U.S Customs officers can note any irregularities and finish processing the goods in Canada. This pilot is the first time Canadian BSOs have worked in the U.S.  Additional pilot projects are being promoted. Canada is working to develop required legislative and regulatory frameworks to make this a reality. Bill C-23, the Preclearance Act,  is one example of this.

Marine Container Examination Facility

CBSA has invested in the new Marine Container Examination Facility at Roberts Banks, which is near completion. This is a joint project with the Vancouver Fraser Port Authority. This facility is scheduled to be operational in the summer of 2018.

CBSA Assessment and Revenue Management

The CBSA Assessment and Revenue Management (CARM) project is forging ahead. This project automates the processes to assess, collect, manage and report on revenue. It enables importers to self-assess and comply with Canada’s trade requirements. In 2018-19 CBSA will work with a third party vendor and external stakeholders to proceed with the design phase of the CARM project.

Improved Compliance and Duty Collection

The CBSA will conduct an analysis in 2018-19 to identify improvements in trade compliance and duty collection as identified in the 2017 Auditor General’s Report.

Anti-dumping and Countervailing

CBSA will implement new scope proceedings and anti-circumvention investigations to further strengthen the administration of the Anti-dumping and Countervailing Program.

Trusted Trader Mutual Recognition Arrangements

The CBSA intends to advance the Trusted Trader Mutual Recognition Arrangements (MRA) with China and EU and is pursuing an MRA negotiation with Hong Kong and Brazil.

Trusted Trader Corridor Concept

CBSA intends to pilot a Trusted Trader Corridor Concept (TTCC) in the highway mode. The TTCC is expected to create a seamless border experience where pre-approved, low-risk drivers with pre-approved low risk goods can cross the land border though an expedited process.

Harmonize C-TPAT and PIP

CBSA is moving to harmonize the Partners in Protection (PIP) program with the U.S. Customs-Trade Partnership Against Terrorism(C-TPAT) program with a focus to implement a joint application process for highway carriers.

Emerson FAST Lanes

CBSA intends to expand Free and Secure Trade (FAST) by adding FAST lanes in Emerson, Manitoba in late 2018

Revise Trade Appeal

CBSA intends to revise the internal Trade appeal process.

Additional Port Of Entry

And lastly the CBSA will continue to work closely with the Windsor-Detroit Bridge Authority to advance the Gordie Howe International Bridge project, which will add a new border crossing option at the busiest trade corridor between Canada and the U.S.

Advice You Can Trust

Pacific Customs Brokers strives to stay ahead of all CBSA and Canadian government initiatives. If you need any help regarding CBSA’s new initiatives please contact our experienced trade compliance team for expert trade advisory services.

Jan Brock | Author

 

 

 

 

 

 

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St. Patrick’s Day and Irish Trade

Pot of Gold Leprichaun Hat

St. Patrick’s Day, the holiday that started from Saint Patrick, a 5th-century missionary. Today we know it as a celebration of Irish culture. St. Patrick’s Day is unique because, according to Time, it is globally the most celebrated national holiday. The Irish who have dispersed around the globe have brought their culture along with them; however, the Irish have more than just fun culture to offer. In this post we will take a look at how a beautiful country with wonderful people has positively contributed to the world of trade.

High-Tech Industry

If you were to visit Dublin, Ireland and walk along the Dublin Docks you would be doing a double take on where you are. The docks are lined with large, futuristic buildings that don’t make you think about the quaintness of Ireland, but rather the tech giants of Silicon Valley. This is because Ireland has attracted the biggest and brightest U.S. tech companies. How? With the most profitable tax rates. Ireland is the world’s most profitable country for U.S. corporations. With a corporate tax rate of only 12.5% companies like Apple, Facebook, Google and Twitter have large offices located on the Dublin Docks. U.S. corporations receive benefits from the lower corporate tax rates while being able to pull from an English-speaking pool of potential employees.

The Tara Mines

In the early 1970’s an exploring team discovered the Tara Mines. You might be thinking what is special about the Tara Mines, Ireland and trade? Well, the Tara Mines contain the largest amount of zinc found in Europe and is the 9th largest zinc mine in the world. Zinc is important because it is used to galvanize other metals. This helps prevent metals such as steel and iron from corroding or rusting.

The Tara Mines also contain a large amount of lead, specifically the 2nd largest amount in Europe. Lead is important because it is used in many items we use on a daily basis which includes car batteries, ammunition, weights, radiation protection and paints just to name a few.

Big Pharmaceutical

The beneficial tax rates not only helped attract the top U.S. tech companies, but also the pharmaceutical industry. Amazingly, Ireland has 9 of the top 10 largest pharmaceutical companies in the world. Even at the low corporate tax rates of 12.5% Ireland receives over €1 billion in corporate tax every year. Every time you take some medicine for an ailment or allergic reaction, there is a very good chance the best and brightest in Ireland lent a helping hand.

Counting Sheep

Ireland’s main economic resource is its large fertile pastures. Just under 10% of all Irish exports are agricultural foods and drinks. The beautiful natural scenery throughout Ireland lends itself to over 5 million sheep and just under a million cattle. Interesting fact, there are more sheep in Ireland than humans.

The Luck of the Irish

The Irish have a lot to be proud of. Not only do they have wonderful people with a fun-loving culture, but a strong export economy that helps many people in many countries. If you want to explore your options and import products from Ireland or Northern Ireland, contact us to see how a trade advisory expert can help you. The luck of the Irish may be on your side.

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Will CPTPP Impact NAFTA Negotiations?

North America

Prior to the latest NAFTA negotiations, Canada entered into the new Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). In this blog, we look at how this may impact the next round of NAFTA negotiations in late February, early March.

Before the January NAFTA Negotiations

The Comprehensive and Progressive Agreement for Trans-Pacific Partnership

Canada and Mexico has agreed to the new CPTPP. An international trade agreement between 11 countries the U.S. previously withdrew from on January 23rd, 2017.

With the U.S. adopting a bilateral trade agreement philosophy, while Canada and Mexico have joined the multilateral CPTPP agreement. How will this impact the NAFTA negotiations going forward?

 

New U.S. Duties on Solar-Panels and Washing Machines

Also, the U.S. recently introduced new import duties on solar-panels and washing machines. Solar-panel duties have increased by 30%, while washing machines duties have increased by 50%. The new duty on solar-panels will have a minor impact on Canada and Mexico. The new washing machine duty will only impact Mexico.

 

January’s NAFTA Negotiations: Round Six

Tuesday, January 23rd, Canadian, American and Mexican representatives met in Montreal for the sixth round of NAFTA negotiations. Let us focus on the four main focal points surrounding the latest NAFTA negotiations. Chapter 19, the auto parts industry, the dairy industry and the sunset clause.

Chapter 19: Trade Disputes

The U.S. is looking to eliminate Chapter 19 in the NAFTA negotiations. Currently, Chapter 19 allows for trade disputes between two NAFTA countries to go through an independent third party arbitrator. This prevents Canada and Mexico from having to enter into the U.S. legal review process for anti-dumping and countervailing duties imposed by the U.S. government.

Previous Chapter 19 rulings have favored Canada. Most recently Boeing made a bid to increase import duties by 300% on Bombardier’s CSeries. An independent third party arbitrator, the U.S. International Trade Commission (USITC), voted 4-0 to reject the 300% duty because it did not have a negative impact on the U.S. aircraft industry.

The Auto Parts Industry

With the new CPTPP in place, the NAFTA negotiations are going to feel some extra pressure in the auto parts industry. At the moment, NAFTA allows for 37.5% of a cars parts to come from outside of Canada, the U.S. and Mexico. However, in the new CPTPP agreement, the percentage of allowable foreign composition is 55%. This difference will create a more competitive market for auto parts in Canada and Mexico, while at the same time acting as a disadvantage for Canadian and Mexican companies creating auto parts.

The U.S. is aiming to decrease the percentage of car parts that come from outside of North America to 15%. Translating to more job opportunities for Americans in the auto industry.

Canadians are trying to introduce a line of thinking that auto industry software and other high-tech equipment should be taken into consideration when talking about the net cost of auto parts since a higher percentage of software and high-tech equipment is created and produced in Canada, the U.S. and Mexico. Thus adding to the auto parts percentages.

The Dairy Industry

The CPTPP agreement has also opened up the dairy debate as well. Since there has been a small opening to Canada’s originally closed market, the U.S. wants greater access to Canadian consumers. Currently, if a U.S. dairy farmer was to export milk to Canada, they would face a 270% duty. Eliminating dairy trade barriers would be beneficial to Canadian consumers, but would deal a great blow to Canadian dairy farmers who presently enjoy the benefits of the ongoing trade barrier.

The Sunset Clause

The U.S. also wants to implement a sunset clause. A sunset clause would allow any of the three NAFTA countries to walk away from the proposed agreement after five years. If the sunset clause was to be implemented it would almost certainly mean the end of the current NAFTA agreement in five years, since it would be unlikely for all three countries to be happy with the state of the agreement in five years.

 

NAFTA Negotiations and Trade

Despite all of the uncertainty with NAFTA, trade between the three countries has remained steady and consistent. Everyday airplanes, trains, cargo ships, and trucks transport essentially everything you use daily. If you would like to explore international trade opportunities, give us a call. We can provide you assistance with customs clearance, freight forwarding, trade education and trade advisory services.

 

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How to Import for a Trade Show in the U.S. or Canada

 

 

Trade Show Imports Stand

Are you attending a trade show across the border? This post will teach you what you need to know about Trade Show Imports into the U.S. or Canada.

Trade Show Imports: Saul Better Call Us

Saul was going to display his super duper machine at a trade show in Houston, Texas. His machine was bound to be a disruptor in the market and he was excited to show it off. Saul booked his booth, made his travel plans and hooked his machine to the back of his pick up, threw his promotional material in his suitcase and headed for the border.

What Saul did not know was he had to take certain steps before he made his way out of Canada and into the U.S.

  1. He did not realize that the entire bottle of window cleaner would need to be declared and the Toxic Substances Control Act (TSCA) would require a statement for the declaration.
  2. Saul did not know that the promotional material he would distribute at the event would need a consumption entry
  3. He did not understand that the super duper machine could be a consumption entry or a bond. A consumption entry would be the better choice if the machine is dutiable. If it is not dutiable, it would be better to use a bond. However, a bond comes with a tight timeline and increases the chance of a penalty.

 

Needless to say, Saul was late to his trade show and he had a few more expenses (in the form of penalties) that he did not account for in his budget.

With 2018 freshly upon us you might have the same opportunity ahead. A trade show could likely be on your horizon. If you are asking the question “how can I get my trade show goods across the border?” first off, kudos to you for researching. Secondly, hooray, you have come to the right place.

In this blog you will find a practical checklist to help you prepare for an international trade show. As well as, what you will need to know to import your trade goods into the U.S. or Canada.


Trade Show Imports Checklist (7)

(1) Take Inventory

Make a list of what you want to bring to the show and split the list into two sections.

Section One

Section one will include anything you could leave behind. Anything you would use, consume, giveaway or sell while in the country.

Section Two

The second section will include everything you will bring home in its entirety.

(2) Remove Purchasable Products

If you have an item that will be used or consumed in the visiting country, a simple option is to buy the product once you arrive rather than import them. A good example would be cleaning supplies. Even something as simple as glass cleaner could provide a hold-up at customs. Purchasing supplies in the country you are visiting will eliminate risks when clearing customs.

(3) Are the Goods Eligible?

Check with Canada Border Services Agency (CBSA), U.S. Customs and Border Protection (CBP), the Participating Government Agency, or your Customs Broker to see if there are any restrictions on the goods you are wanting to take to the show.

(4) Marking, Quantity & Packaging

All samples must meet marking regulations, and they must be within the country’s quantity and packaging requirements. Otherwise your goods could experience delays or be seized at customs.

(5) Entry Type

Find out from your customs broker what is the best type of entry to use for your goods. A Customs Broker will be able to help with your timeline requirements and potentially reduce your costs at customs.

(6) Letter of Recognition

The International Events and Convention Services Program (IECSP) was developed to encourage businesses and organizations to hold trade shows, conventions, events and exhibitions in Canada. They provide guidance and information to facilitate event participants, foreign exhibitors, and temporary imported goods and materials, into and out of Canada.

CBSA offers the IECSP in order for you to have one primary contact to provide you with federal government services and requirements associated with international events and conventions taking place in Canada.

Some trade shows will have a letter of recognition that is provided from CBSA to the event organizer. If the trade show you are attending has a letter of recognition you will be able to contact the event organizer for a copy of the letter of recognition.

If your Trade Show has a letter of recognition, the letter will contain:

  • The name and type of event
  • The date and location of the event
  • The expected number of participants
  • Who is responsible for processing any CBSA documents
    • Event Organizer
    • Customs Broker
    • Delegated Representative
  • A list of goods brought into Canada, their origin and intended use
  • A list of controlled goods being imported
  • A list of goods that will be sold or given away
  • If applicable, a note requesting the event be considered for Border to Show Service
  • What goods can possibly enter duty free and/or receive partial relief from GST/HST

What if the trade show you are attending does not have a letter of recognition? If your trade show does not have a letter of recognition, it means you have no designated exemptions.

(7) Time Limits

Some temporary imports and sample imports must be exported within a certain time frame. Take note of the entry date to make sure you do not go past expiry.

 


Trade Show Importing into the U.S.

Is Your Import Duty Free?

Your import will be duty free if it is recognized in a letter of recognition, if it is imported under a Temporary Import Bond (TIB), or if it is eligible to be imported under a Free Trade Agreement.

Is a Merchandise Processing Fee Applied?

All of your imports require a merchandise processing fee unless they are under a Free Trade Agreement. Unsure of what a Merchandise process Fee is? Check out our Blog Merchandise Processing Fee (MPF) Explained.

Your Recommended Entry

Consumption entries are recommended for anything that is consumable. Any goods where the duty is above $100.00 USD you would best be suited to import under a Temporary Import Bond. Keep in mind Temporary Import Bond items must be exported within 6-12 months depending on the commodity.

Errors You Will Most Often See

In speaking with our U.S. release Operations Manager, Breanna Leininger, she described the most common errors you will see when you try to import items for a trade show into the U.S.:

“The most common errors we see are in packaging and invoicing.  When looking to import goods into the U.S. for a tradeshow it is vitally important to package and invoice consumables such as giveaways separate from the trade show booth. This will prove to be helpful if you are flagged for inspection, as well as open you up to entry filing options that will save you time, money, and a headache.”

Note: We recommend getting items you could buy from a store, such as cleaning supplies, in the country your trade show is in. Items purchased in a store can require additional statements and manufacturing information you may not have access to when purchasing from a store.

Trade Show Imports U.S.

 

 

 


Trade Show Importing into Canada

Is Your Import Duty Free? Tax Free?

Your import will be duty free if it is recognized in a letter of recognition, if it is imported under a Temporary Import Bond, or if it is eligible to be imported under a Free Trade Agreement. To be tax free your import must either be imported on a Temporary Import Bond or waived by a letter of recognition.

Your Recommended Entry

Souvenirs and advertising materials intended for sale or consumption in Canada must be accounted for on a B3. Any branded paraphernalia left in Canada must also be accounted for on a B3. E29Bs are required for returning branded paraphernalia, office machines and equipment, as well as, display goods.

Errors You Will Most Often See

In speaking with our Canadian release Operations Manager, Cherie Storms, she described the most common errors you will see when you try to import items for a trade show into Canada:

“Forgetting to ask the event organizer if the event has been approved by CBSA, and if so, travelling with the approval letter which supports the purpose of entry. Also, bringing in consumables that will not be returned, forgetting that there may be duties and taxes on those”.

Trade Show Imports Canada

 

 

 


Why You Should Declare Your Trade Show Imports

Not declaring items intended for business purposes is illegal. Customs can make samples useless for resale and your goods could even be seized or destroyed. Keep in mind not being prepared at customs can delay your journey. Being forced to complete all of the paperwork at the port of entry can be a huge headache and time consuming. Knowing before you go will make your trade show experience pain-free.

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