Canada Still Works for U.S. Sellers

Cross-border ecommerce between the United States and Canada has rarely been more uncertain than in 2025. Nonetheless, for U.S. merchants, Canada remains an easy first step into international sales.

Canadian shoppers buy heavily from U.S. sites. But this year’s holiday shopping season is testing even experienced sellers. Tariffs, a postal strike, and shifting taxes have turned what should be a smooth northern route into a logistical puzzle.

Tariff Dust-Up

Many pundits have described recent trade relations as a war. Helaine Rich, the vice president of strategic sales and administration at ePost Global, an international shipping provider, was more tactful.

“The current administration really took a look at what countries are asking [American businesses] to pay when we’re shipping into their countries and what they’re charging as a premium on U.S. goods,” said Rich.

The result was a tariff for the United States that upset North-South relations. The back-and-forth trade negotiations included on-again, off-again reciprocal tariffs and surtaxes from the Canadian government — in some cases, up to 25%.

At peaks in the U.S.-Canada dispute, ecommerce “shipment volumes dropped quickly as tariffs rose and some Canadian consumers began avoiding U.S. brands,” Rich said.

Yet duties existed long before the recent dust-up.

Canadian Duties

“Nothing is more frustrating than thinking you paid for a product and then getting surprised at the door that you have to pay this, that, and the other duty,” said Rich.

Unfortunately, this is a common occurrence for Canadian shoppers buying from American ecommerce stores. Here are a few examples of what Canada typically adds.

• Duties. Based on the type of goods, their origin (including whether they qualify under the United States–Mexico–Canada free-trade agreement or other treaties), and classification (harmonized system code).

• GST. The Canadian goods and services tax applies to most imported goods, calculated on the Canadian-dollar value of goods plus duties.

• PST or HST. Depending on the destination province, the importer or consumer may also owe provincial sales tax (PST) or harmonized sales tax (HST), combining federal and provincial components.

Postal Strike

The final challenge, beyond a volatile trade environment and duties due, is getting a package delivered in Canada.

Rich noted that the Canadian Union of Postal Workers is again holding strikes during the holiday season, delaying most holiday shipments, as it did last year.

Canada Post is the nation’s primary last-mile delivery service. Thus sending shipments via the U.S. Postal Service or any other carrier that partners with Canada Post is a risk.

For instance, Walmart Marketplace does not allow Canada Post or any affiliated services. Sellers who try to circumvent Walmart’s restriction face suspension.

Opportunity Nonetheless

Despite tariffs, taxes, and strikes, Canada remains a significant growth market for U.S. ecommerce retailers.

Depending on the projection, total Canadian ecommerce sales will range from $40 billion USD to $43 billion in 2025. About 20% of those sales will go to American stores, making the Canadian market worth around $8 billion for the year. (In contrast, 2024 U.S. retail ecommerce sales were roughly $1.2 trillion.)

Canada offers U.S. merchants geographic proximity, familiar consumer behavior, and lesser competition. Plus, nearly all consumers speak English.

If a U.S.-based online store wants to expand internationally, Canada is a great place to start.

Selling to Canada

Success requires researching three factors: cost competitiveness, duty-paid pricing, and carrier contingencies.

Cost

Before marketing to Canadian shoppers, merchants should model the total landed cost — product, shipping, duties, and GST/HST — to ensure each sale is profitable, according to Rich at ePost Global.

This step includes identifying and understanding tariffs or product restrictions. Canada forbids the import of some products sold domestically in the United States.

Bottom line: Can a U.S. business competitively sell its products into Canada?

Duty-paid pricing

Duty-paid pricing is akin to free shipping.

Shipping fees create friction, prompting shoppers to abandon orders if too expensive. Ditto for import duties.

Free shipping offers remove that friction.

The equation is similar to “delivery duty paid.” If paying Canadian duties for customers increases sales volume enough to offset the cost and generate more profit, do it.

Carriers

Finally, no carrier is a good choice when it is experiencing a strike. Shipments will almost certainly encounter delays.

Have a contingency plan that uses carriers not impacted by the current Canadian strikes.