Clicking “add to cart” may soon come with some additional sticker shock.
As tariff pressures force some sellers in China to increase their prices for U.S. markets, some retail experts say Canadians shopping online could potentially feel the ripple effects on everything from electronics to socks.
This comes as U.S. President Donald Trump hiked duties on Chinese goods to 145 per cent this week, raising the stakes in a trade war that threatens to upend global supply chains. In response, Beijing on Friday increased its tariffs on U.S. imports to 125 per cent.
Canada may have avoided a new round of tariffs, but it doesn’t mean we won’t be affected by the China-U.S. trade war eventually, said Jean-François Ouellet, an associate professor in entrepreneurship and innovation at business school HEC Montréal who specializes in international marketing.
“Canada is often caught in the crossfire,” Ouellet told CBC News.
That’s because many e-commerce orders placed on Canadian sites — including Amazon.ca — are fulfilled from the United States or routed through U.S. distribution centres, he said.
“If those goods are made in China, and the U.S. slaps new tariffs on them, the increased cost may get passed on to Canadian shoppers — especially if the product crosses into the U.S. before arriving in Canada.”
With Chinese goods facing a 104 per cent tariff from the U.S., some businesses are looking to adapt their supply chains to avoid higher costs, but others say they face no choice but to pass the price increase on to consumers.
Will Amazon prices go up?
It’s looking that way in the U.S., at least.
China’s largest cross-border e-commerce association said on Wednesday that many Chinese companies that sell products on Amazon are preparing to boost prices for the U.S. or quit the market due to the tariffs.
This sentiment was echoed by Amazon CEO Andy Jassy, who told CNBC on Thursday it’s likely that its network of millions of third-party sellers — many of which are based in China or source their products from there — will have to pass the cost along to consumers.
By Friday, it had already started happening. Chinese electronics company Anker, which is one of Amazon’s largest sellers, raised prices on a fifth of its products on the U.S. platform.
What about Amazon.ca?
It’s less clear how this will affect Canadian consumers on Amazon.ca, explained Nicholas Li, an associate economics professor at Toronto Metropolitan University.
Theoretically, the domain name doesn’t necessarily correlate with warehousing and distribution, Li said. For example, you can buy products shipped from other countries on Amazon.ca.
“But in practice, most of the goods you would see on Amazon.ca are warehoused in Canada, and the prices are already inclusive of any tariffs,” he said.
So if a customer orders from Amazon.ca, they will not likely see price increases from U.S.-Chinese tariffs, said Samuel Roscoe, a lecturer in operations and supply chain management at the University of British Columbia’s Sauder School of Business.
Goods coming through U.S. warehouses or distribution networks, however, could “still be hit by the ripple effects,” Ouellet, of HEC Montréal, added.
Could other shopping sites be affected?
Popular online shopping sites like Temu, Shein and Walmart.ca could be affected by the China-U.S. tariffs, both Li and Ouellet said. Last year, for example, Chinese sellers accounted for 28 per cent of all active sellers on the Walmart website, according to Marketplace Pulse, a firm that collects data on e-commerce businesses.
A growing number of e-commerce orders — especially from platforms like Temu, Shein, or even third-party Amazon sellers — are dropshipped directly from China to the customer, Ouellet said.
While these shipments often bypass U.S. tariffs, if Canada were to follow the U.S. lead or increase inspections, duties or postal handling fees, it could quickly affect prices or delivery times, he added.
“And if U.S. policy disrupts global shipping lanes or creates uncertainty in sourcing, even direct-from-China dropshipping could become more expensive over time.”
OK, but are Canadian shopping sites safe?
Many Canadian companies manufacture items in China. Aritzia, Lululemon and Canadian Tire, for example, all manufacture some of their products overseas and sell them south of the border — although some are working to shift production outside China.
If these goods are imported via the U.S. or if raw materials are affected by tariffs, production costs can rise, Ouellet said, adding that larger companies may have more flexibility in their supply chains to adapt in the short term.
Lululemon and Aritzia also have distribution centres in Canada, Roscoe said, which allows them to avoid tariffs.
Looking to buy Canadian in response to the trade war with the U.S.? Here’s the difference between goods labelled ‘Made in Canada’ and ‘Product of Canada.’
What items could rise in price the most?
Electronics (such as phones, accessories and small appliances), apparel, footwear and housewares are likely to be the hardest hit, Ouellet said.
“These are categories where China has long been a dominant supplier, and many of these items travel through U.S. logistics hubs before reaching Canadian consumers,” he said.
In principle, goods that are imported into the U.S. for re-export to Canada shouldn’t be subject to U.S. tariffs, Ouellet said, but in reality, real-world logistics are “messy” with a lot of room for error.
“U.S. customs agents are already overwhelmed, and the rules around tariffs right now are mind-boggling,” he said.
“Goods meant for re-export to Canada might get mistakenly classified and taxed, or suppliers might decide it’s just safer and easier to build those potential costs into their prices — which ultimately trickles down to the Canadian shopper.”
When will we see prices go up?
Li, of Toronto Metropolitan University, points out that there was a lot of stocking up of inventory and pre-emptive importing in anticipation of these tariffs. So some of the price changes might be delayed due to a “wait and see” approach, he said.
This is especially true for Canadians, Li added, since the impact here is more indirect.
“But by delay, I mean months, not years.”
Is there a silver lining for Canada anywhere?
Both Ouellet and Li say there’s a chance some prices for Canadian consumers could actually go down, depending on how things play out. For example, if U.S. tariffs on Chinese producers make it harder for them to sell to the U.S., this may lead them to lower their prices in other markets like Canada, Li said.
And if U.S.-China trade grinds to a halt, China will likely look to redirect its exports elsewhere, Ouellet said, which could benefit Canadian consumers in some categories if surplus supply floods the market.
“So we might see higher prices on some products that pass through the U.S.,” he said, “but also unexpected bargains on others, especially from sellers shipping directly from China to Canadian buyers.”
