You’re not alone if you’ve noticed your grocery bill creeping up. While inflation is easing overall, the price of food keeps climbing. Why? One primary reason is tariffs or extra taxes on imported goods. Recent decisions by the Canadian government, the U.S., and China have directly influenced food prices, especially for imported items.

The good news? Canada has taken steps to avoid making things worse for shoppers. However, tensions with trade partners still affect the cost of many food items on your grocery list.

What Are Tariffs?

Tariffs are taxes on goods coming into a country from abroad. When a country charges a tariff on something like fruit or packaged snacks, importers pay more for those products, and those costs are usually passed on to you, the shopper.

Governments sometimes use tariffs to protect local businesses, punish unfair trade practices, or encourage people to buy more local products.

What’s Been Happening?

Canada Tries to Protect Shoppers

Canada recently chose not to impose tariffs on most American food items, even though it has imposed extra taxes on other U.S. goods like orange juice, wine, and some appliances. The Canadian government decided to avoid driving grocery prices even higher.

China Hits Back

Meanwhile, China has added new tariffs on Canadian exports, such as canola, pork, and beef. That’s bad news for Canadian farmers and could eventually affect prices at home, too.

Products Now Labeled for Transparency

Labeling tariff-affected products with a ‘T’ helps shoppers make more informed choices, leading to more people choosing Canadian-made goods instead.

Inflation Is Down, But Groceries Still Cost More

Overall, inflation is going down in Canada, so general prices are rising more slowly than before. However, Food and alcohol prices continue to increase, partly due to the expiration of temporary tax relief. Consumers may continue to feel financial pressure at the checkout.

How Tariffs Affect What You Pay

Here’s how it works:

When a product comes from another country and gets hit with a tariff, the importer (the person or company bringing it into Canada) has to pay more. To stay profitable, they raise prices when selling to stores, and stores pass that increase on to you.

Here are a few areas where that’s already happening:

  • Fruits & Veggies: When avocados or tomatoes are out of season, suppliers import them and increase prices to cover higher costs.
  • Meat and seafood: Tariffs from countries like China can lead to higher production and shipping costs, which affect what you eat.
  • Dairy & Packaged Foods: When tariffs target certain ingredients, everything from cheese to peanut butter becomes more expensive.

Even if you don’t see the word ‘tariff’ on a price tag, retailers may have already included those costs in the final price.

What Can Importers Do to Keep Costs Down?

If you’re in the business of importing food or goods into Canada, here are a few ways to help manage the impact of tariffs:

1. Check Your Product Codes

When you import goods, customs authorities assign specific codes to classify them. Ensure your items are listed under the proper codes to avoid paying more than necessary.

2. Apply for Exemptions

Sometimes, you can request an exemption from paying tariffs, mainly if no Canadian company manufactures your imported goods. Securing an exemption like this can significantly reduce your costs.

3. Use Bonded Warehouses

You can store goods in special warehouses where you don’t have to pay tariffs until you’re ready to sell them. This thing can help with cash flow.

4. Source from Tariff-Free Countries

Canada gives tariff breaks to some developing countries. Switching suppliers to those countries could cut your costs.

5. Lock in Long-Term Pricing

Tariffs might go up again. By signing long-term deals with suppliers now, you can lock in prices and avoid surprises later.

Conclusion

The situation is still changing. Trade relationships between Canada, the U.S., and China remain tense. More tariffs or changes to existing ones could still come. That means both shoppers and importers need to stay alert and plan.

Clearit Canada Can Help

Clearit Canada helps businesses like yours navigate tariffs, save money, and stay compliant. Whether you need help classifying your goods, finding exemptions, or exploring better sourcing options, we’ve got you covered.

Worried about rising costs? Clearit Canada can help streamline your import process and build a strategy that keeps your goods moving smoothly. Reach out today for expert customs support tailored to your business and your bottom line.

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