SCHUMER, GILLIBRAND: U.S. RETAILERS ARE MISSING OUT ON CANADIAN CUSTOMERS BECAUSE CANADIAN DUTY FREE POLICIES FOR SHORT TRIPS ACROSS THE BORDER DISCOURAGE RESIDENTS FROM SHOPPING IN U.S. – SENATORS PUSH CANADIAN GOVERNMENT TO BRING DUTIES ON PAR WITH MORE FAVORABLE ONES IN U.S.; WOULD BE BIG BOOST TO BUFFALO, WATERTOWN, PLATTSBURGH RETAILERS
U.S. Currently Allows American Residents Shopping in Canada to Bring Up to $200 Worth of Merchandise Purchased in Canada Back to U.S. Duty Free For Travel Lasting Less Than 48 Hours & Up to $800 for Travel Longer Than 48 Hours, But Canada’s Duty Free Policies Are Far Less Favorable
Businesses in Buffalo, Plattsburgh, Watertown & Many Other Places in NYS Are Hurt By Canada’s Policy, Which Discourages Short Shopping Trips Across the Border – Senators Urge Canada to Bring Its Duty Free Policy In Line With The U.S.
Schumer, Gillibrand: Raising Canadian Duty Free Exemptions Would Help Border Cities Tap Into Full Economic Potential
Today, U.S. Senator Charles E. Schumer and Kirsten Gillibrand announced that they are urging Canada to diminish trade barriers by increasing the duty free thresholds for Canadians making shopping trips across the U.S border and shipping low-value U.S. goods into Canada. Schumer and Gillibrand explained that, currently, the U.S. duty free policy is more favorable for American shoppers traveling back from Canada than Canada’s is for Canadian shoppers traveling back from the U.S. Schumer and Gillibrand said if Canada eased its duty free trade restrictions, more trade could be fostered between the two countries. Canada’s current policies, Schumer and Gillibrand said, are discouraging Canadians from shopping in the U.S. – in places like Buffalo, Watertown and Plattsburgh – which is resulting in American retailers missing out on potential customers and revenue. Schumer and Gillibrand said that Canada’s increasing their duty free threshold would bolster economic growth and help local retailers on both sides of the border.
“Upstate New York retailers from Buffalo to Watertown to Plattsburgh are missing out on potential business because of disproportionate and burdensome duties Canada places on its residents who visit the U.S. and shop in our stores. Right now, Canadian families wishing to spend the day shopping in Upstate New York must carefully watch the clock to calculate how high their duty rates will be, and that shouldn’t be the case between neighbors. America’s duty free policies are much more favorable than Canada’s and Canada, our great friend and ally, should level the playing field,” said Senator Schumer. “That is why we are calling on the Canadian government to bring their duties on par with ours so we can allow both of our economies to grow and prosper.”
“Businesses in Buffalo, Niagara Falls, Plattsburgh and Watertown are missing out because Canada places a higher burden on its residents who shop in New York than the U.S. does on the New Yorkers who shop in Canada,” said Senator Gillibrand. “Canada’s current policies put New York companies at a disadvantage to their competitors over the border and discourage Canadians from shopping in the United States. I urge Canada to increase their duty free threshold to create a level playing field that will benefit both American and Canadian companies.”
Currently, the U.S. permits American residents traveling across the border to shop in Canada to bring up to $200 worth of merchandise purchased back to the U.S. duty free for travel lasting less than 48 hours. For travel lasting longer than 48 hours, U.S. residents are permitted to bring back up to $800 worth duty free. However, Canada’s duty free policy is far less favorable toward the U.S. and acts as a trade restriction. In contrast to U.S. policy, Canada currently does not allow for its residents returning from U.S. trips under 24 hours to bring back items duty free. For trips between 24 and 48 hours, Canada allows its residents to bring up to $200(CAD) worth of merchandise purchased in the U.S. back duty free, and for trips over 48 hours, residents can bring back merchandise purchased across the border duty free up to $800(CAD). In addition, shipments made via courier are not subject to paperwork or duty assessment if under $200 when entering the U.S. from Canada, where as Canada’s duty assessment begins at goods valued above $20(CAD). For example, a $100 shipment of apparel purchased on the internet and shipped from Canada into the U.S. would not be subject to a US import duty, but the same purchase made from a U.S. company and shipped to Canada would be subject to a duty. While duty free policies are in place in Canada, they are nowhere as favorable as the U.S. policies, Schumer and Gillibrand said. Schumer and Gillibrand said more Canadians would take short shopping trips over the border if Canada’s duty free policy were on par with U.S. duty free rates to level the playing field for U.S. companies.
For example, if a Canadian family purchases $100(USD) worth of apparel on a day drip in Buffalo, this merchandise will be subject to a $22(CAD) duty when that family travels across the bridge into Ontario, Canada. In contrast, an American family from Buffalo, purchasing the same merchandise on a day trip in Niagara Falls, Canada is not subject to any duty on that merchandise when they come back into the U.S.
Schumer and Gillibrand said that Canada’s duty free exemptions for short trips across the border and low value shipments discourage Canadian residents from shopping in the U.S. and generating revenue for American retailers, particularly in states that border Canada like New York. In addition, an increase in low-value shipment exemptions, the Senators said, would particularly benefit small- and medium-sized businesses operating in e-commerce and have a positive impact on U.S.-Canadian trade relations on a larger scale. Canada’s raising their duty free exemptions would likely increase economic benefits for both countries and would lead to customs efficiencies. The Senators said that, instead of policing low-value shipments and merchandise from short trips across the border, a raised duty free exemption would allow the Canada Border Services Agency to dedicate more resources toward higher risk shipments and higher ticket items than the ones that are likely to come across the border from every day retailers in the U.S.
Schumer and Gillibrand urged the Canada’s government and its Ambassador to increase its duty free exemptions to put it on par with the U.S. in order to further expand its current trade relationship and make it more mutually beneficial for both countries. In addition to Schumer and Gillibrand, Senators Cantwell, Risch, Crapo, Tester, Daines, Peters, Baldwin, Ayotte, Shaheen and King co-signed the letter to be sent to the Canadian Ambassador.
A copy of the Senators’ letter to Canadian Ambassador Gary Doer is attached.
Dear Mr. Ambassador:
The United States places tremendous value on our trade relationship with Canada. With $632 billion in total goods trade (both import and export) in 2013, Canada is the largest goods trading partner for the United States. At $300 billion in total goods exported to Canada, your country is also our largest goods export market. In support of increased goods trade between our two countries, and as members of the United States Senate representing states that border Canada, we are writing to express our concern regarding Canada’s de minimis threshold on low-value imports to Canada.
De minimis thresholds vary greatly from country to country; however, Canada has one of the lowest thresholds at $20 per shipment or a personal exemption of $200 for Canadians returning from international travel. The United States has a de minimis threshold of $200 for imported goods delivered via a shipper, while Americans returning from international travel have a personal exemption of $800 before meeting the de minimis threshold. Proposed legislation in the U.S. Senate would raise the de minimis level for imported goods delivered via a shipper in the U.S. to $800.
An increase in Canada’s de minimis level would have a significant and positive impact on U.S.-Canada trade, and help to bolster increased economic growth for both countries. An increase would particularly benefit small- and medium-sized businesses operating in e-commerce. Further, in addition to generating net economic benefits, an increase in Canada’s de minimis threshold would create customs efficiencies, allowing the Canada Border Services Agency to dedicate more resources toward higher risk shipments.
Canada’s low de minimis threshold represents an unnecessary trade barrier between our two countries, particularly for low-value, low-risk shipments. We respectfully urge the Canadian government to increase its de minimis threshold, ideally putting it on par with that of the United States, in order to further expand our historic and mutually beneficial trade relationship.
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