Individual purchases from sellers in Canada... anyone know what the tariff situation is now?

[BrianShaw]

As of April 2, 2025:

Fact Sheet: President Donald J. Trump Closes De Minimis Exemptions to Combat China’s Role in America’s Synthetic Opioid Crisis

CLOSING LOOPHOLES IN THE TARIFF SYSTEM: Today, President Donald J. Trump signed an Executive Order eliminating duty-free de minimis treatment for

www.whitehouse.gov

It is unlikely to change once the implementation date occurs but who knows these things for sure?

As of 5/13/2025

https://currently.att.yahoo.com/finance/news/us-cut-minimis-tariff-china-051520824.html

 

[BrianShaw]

It's worse than that. Sales tax in the US can vary intra-state base on locale. You can literally cross a city and/or county line and encounter different rates of taxation. For example, I used to live in the state of IL and I always said that corruption must be expensive given how the tax system worked. (IL is noteworthy for the number of its governors, judges, and city legislators that have ended up in jail. So much so that there is a bumper sticker to the effect of "Illinois: Where the governors make the license plates.)

There are companies like Avalara that actually specialize in providing up-to-date taxation calculations for eCommerce vendors because it's so complicated.

Once upon a time it was customary for us to travel 20 miles to the next county to buy big ticket items, like cars, to take advantage of their lower sales tax rate. That practice, for cars at least, was ended when the state declared that sales tax for cars was based on county of registration rather than county of purchase.

Those companies that address sales taxes are a blessing to small businesses.

 

[loccdor]

I think we'll need some guinea pigs to test it.

 

[chuckroast]

Once upon a time it was customary for us to travel 20 miles to the next county to buy big ticket items, like cars, to take advantage of their lower sales tax rate. That practice, for cars at least, was ended when the state declared that sales tax for cars was based on county of registration rather than county of purchase.

Those companies that address sales taxes are a blessing to small businesses.

It occurs to me that Chinese and other overseas manufacturers could have someone like AliExpress set up a US presence to buy items for a nominal amount - say $1 - warehouse them, and sell them in the US at full price. Then they would return the expected price to the Chinese seller in cash, after purchase, minus a warehousing/handling fee. In effect, they would be a US-resident consignment shop.

I don't know if that would legally circumvent tariffs, but I'll almost bet you someone is thinking about something along those lines.

 

[GregY]

It occurs to me that Chinese and other overseas manufacturers could have someone like AliExpress set up a US presence to buy items for a nominal amount - say $1 - warehouse them, and sell them in the US at full price. Then they would return the expected price to the Chinese seller in cash, after purchase, minus a warehousing/handling fee. In effect, they would be a US-resident consignment shop.

I don't know if that would legally circumvent tariffs, but I'll almost bet you someone is thinking about something along those lines.

I don't think the government would fall for that. Like the Euro VAT..... i'd bet the tariff would be on an assigned value not the nominal cost.

 

[MattKing]

The number on the invoice isn't necessarily determinative.
Duties are chargeable on fair market value.
And if it can be shown that an importer took steps to falsify the value of the goods imported, penalties are quite harsh.
If a Customs broker is involved, they are another indirect source of enforcement, because their ability to do business will be in jeopardy if they are shown to have either participated in, or not been diligent at detecting, any such deceit.

 

[foc]

Post Brexit, some large UK companies opened warehouses or used fulfillment centres in an EU country to allow "the smooth purchase" for EU customers. (IE: make it very easy for the customer to make a purchase and they will buy).

Unfortunately, this all takes time to implement. Meanwhile, customers go somewhere else to make the purchase and may not return. In business, customer retention is usually easier and less costly to achieve than new customer acquisition.

 

[GregY]

In order to have a viable answer you'd need to have a stable set of rulings or implemented tariffs, rather than those that change like the weather.

 

[Alan Edward Klein]

It occurs to me that Chinese and other overseas manufacturers could have someone like AliExpress set up a US presence to buy items for a nominal amount - say $1 - warehouse them, and sell them in the US at full price. Then they would return the expected price to the Chinese seller in cash, after purchase, minus a warehousing/handling fee. In effect, they would be a US-resident consignment shop.

I don't know if that would legally circumvent tariffs, but I'll almost bet you someone is thinking about something along those lines.

Mail Fraud (using the mail system to commit a fraud across state lines) is a US federal offense punishable by a lot of years in federal prison.

a better method of what China is doing is sending goods made in China through secondary countries like Vietnam. The goods are re-marked Made in Vietnam and shipped to the USA with lower tariffs for Vietnam goods.

 

[MattKing]

Mail Fraud (using the mail system to commit a fraud across state lines) is a US federal offense punishable by a lot of years in federal prison.

a better method of what China is doing is sending goods made in China through secondary countries like Vietnam. The goods are re-marked Made in Vietnam and shipped to the USA with lower tariffs for Vietnam goods.

Which is almost certainly fraud as well.

 

[Alan Edward Klein]

Which is almost certainly fraud as well.

It is. But all the prepertrators are in China and Vietnam. It's why we just applied very high tariffs to Vietnam goods as well as Chinese to convince the Vietnam government to stop this pass- through deceipt.

 

[chuckroast]

Mail Fraud (using the mail system to commit a fraud across state lines) is a US federal offense punishable by a lot of years in federal prison.

a better method of what China is doing is sending goods made in China through secondary countries like Vietnam. The goods are re-marked Made in Vietnam and shipped to the USA with lower tariffs for Vietnam goods.

I was decidedly not promoting the idea of fraud.

I was asking the question/thinking out loud whether or not a consignment model as described would be legal under the tariffs system.

Also, and for the record, mail fraud across state lines is covered by a rather different body of laws than trans national chicanery.

 

[MattKing]

It is. But all the prepertrators are in China and Vietnam. It's why we just applied very high tariffs to Vietnam goods as well as Chinese to convince the Vietnam government to stop this pass- through deceipt.

The importer would likely be caught up by something like this.
If they turn a blind eye, they are participating in the fraud.
If they are fooled by it, they still will have to deal with consequences.

 

[chuckroast]

The importer would likely be caught up by something like this.
If they turn a blind eye, they are participating in the fraud.
If they are fooled by it, they still will have to deal with consequences.

I have a sort of technical legal question here that you may be able to answer.

Is "fraud" actually a defined thing under international trade law? I realize that failing to comply with the various trade laws can have consequences all they way up to severe fines and possibly, even prison. As just one example, US laws concerning smuggling can be applied.

But my understanding was that "fraud" is a specific kind of felony which is defined as such only by Federal or state/provincial laws.

What am I missing here?

 

[MattKing]

I have a sort of technical legal question here that you may be able to answer.

Is "fraud" actually a defined thing under international trade law? I realize that failing to comply with the various trade laws can have consequences all they way up to severe fines and possibly, even prison. As just one example, US laws concerning smuggling can be applied.

But my understanding was that "fraud" is a specific kind of felony which is defined as such only by Federal or state/provincial laws.

What am I missing here?

Whether something is or is not a crime or offence depends on the jurisdiction and the law there.
Whether something is fraudulent or deceitful depends on what values you live by.
There is lots of overlap.
And you can have one action bring rise to different legal consequences in several places all at once - particularly when you are talking about importing or exporting something - because actions can have effects in more than one jurisdiction.
This stuff is wonderfully complex, because the world is wonderfully complex, and people in one jurisdiction are assumed to rely on the actions of other people in other jurisdictions.

 

[chuckroast]

Whether something is or is not a crime or offence depends on the jurisdiction and the law there.
Whether something is fraudulent or deceitful depends on what values you live by.
There is lots of overlap.
And you can have one action bring rise to different legal consequences in several places all at once - particularly when you are talking about importing or exporting something - because actions can have effects in more than one jurisdiction.
This stuff is wonderfully complex, because the world is wonderfully complex, and people in one jurisdiction are assumed to rely on the actions of other people in other jurisdictions.

Yes, all that make sense. But, I was specifically wondering whether "fraud" was a specifically defined legal term in international laws of commerce. Domestically, of course, we have wire fraud, or bank fraud, or ... <something>fraud. I was just asking whether this term had meaning in international law.

 

[MattKing]

Yes, all that make sense. But, I was specifically wondering whether "fraud" was a specifically defined legal term in international laws of commerce. Domestically, of course, we have wire fraud, or bank fraud, or ... <something>fraud. I was just asking whether this term had meaning in international law.

"International Law" usually consists of either:
1) rules respecting how laws in one jurisdiction are applied or enforced in other jurisdictions; or
2) international agreements/conventions/treaties that deal with specific issues rather than general principals, plus the rules about how they are applied or enforced in the jurisdictions that are parties to them.
There may very well be an agreement that deals with fraudulent labelling or declaration of origin or valuations respecting exported and imported goods - I'm not sure - but it is that sort of "law" that one would need.
The biggest challenge, of course, is how one enforces something like that. Outside of the World Court, there really aren't any resources equipped to enforce such law.

 

[Alan Edward Klein]

Yes, all that make sense. But, I was specifically wondering whether "fraud" was a specifically defined legal term in international laws of commerce. Domestically, of course, we have wire fraud, or bank fraud, or ... <something>fraud. I was just asking whether this term had meaning in5

international law.

Lying on a government forms to avoid taxes, tariffs, or cheat the government or people for other reasons is fraud.

 

[chuckroast]

Lying on a government forms to avoid taxes, tariffs, or cheat the government or people for other reasons is fraud.

You're missing the point of my question. Doing those things is illegal, but I was asking whether the term "fraud" was ever explicitly used in international law. The reason I asked is that I have only ever seen the term "fraud" used in domestic law and law enforcement.

I was in no way suggesting that any of this is OK whatever it is called.

 

[mshchem]

I'm ready to skirt all this nonsense. Canada has always been our lovely cousins and friends, same with Mexico. The southwest of the United States was a very fluid area where people from Mexico and the US would travel freely well into the 20th century.

It's the big businesses and as Granny Clampett called them "The Revenuers" that have spoiled things.

 

[chuckroast]

I'm ready to skirt all this nonsense. Canada has always been our lovely cousins and friends, same with Mexico. The southwest of the United States was a very fluid area where people from Mexico and the US would travel freely well into the 20th century.

It's the big businesses and as Granny Clampett called them "The Revenuers" that have spoiled things.

View attachment 398555

I work in an industry that is heavily dependent on international supply chains. I just listened to a readout from an industry pricing expert and the effects of all this - for the moment anyway - are nowhere near as drastic as the doomsayers, pundits, prognosticators, and political pontificators would have you believe.

There is no reason - at least for now - to be tariffied ...

 

[mshchem]

I worry about how much this is effecting smaller businesses and ordinary people. I also worry that this nonsense just encourages people everywhere to rally around the flag. Nutz!!!!

 

[B.S.Kumar]

a better method of what China is doing is sending goods made in China through secondary countries like Vietnam. The goods are re-marked Made in Vietnam and shipped to the USA with lower tariffs for Vietnam goods.

There is a legal loophole here, which lets the country that made the "last substantial transformation" be regarded as the country of origin.
See here: https://taxation-customs.ec.europa....origin-goods/non-preferential-rules-origin_en
This loophole allows luxury items manufactured in low cost countries to be imported into high cost countries where a small finishing process is carried out and marked as originating in the high cost country.

It is also the basis for classifying items that have components from two or more countries. For example, most large format lenses including those manufactured in Germany were mounted in Copal shutters that were made in Japan. For some lenses at least, it is possible that the cost of the cells is far less than the cost of the shutter. Yet, the lens is considered to be manufactured in Germany.

However, the November 2024 judgment in the Harley Davidson case regarding motorcycles "manufactured" in Thailand to avoid the punitive duties imposed on US manufactured motorcycles ruled that the origin of such items would be determined on the basis of the origin of the major portion of its parts.
See: https://www.cassidylevy.com/news/eu...case-on-last-substantial-transformation-test/

It would be interesting to see how luxury brands mark their goods in the coming years.

Kumar

 

[BrianShaw]

Perhaps manufacturers should produce the equivalent of a genealogical tree or DNA report for their products. The manufacturing and supply chain engineers should already have that information.

 

[pentaxuser]

The importer would likely be caught up by something like this.
If they turn a blind eye, they are participating in the fraud.
If they are fooled by it, they still will have to deal with consequences.

Matt the above sounds like a more sophisticated warning than the more brutal version from Tennessee Ernie Ford's "16 tons"

If you see me comin' better step aside
A lot of men didn't, a lot of men died
One fist of iron, the other of steel
If the right one don't getcha, then the left one will

pentaxuser