Explaining Trump’s Claim About Canadians Smuggling Shoes Because of ‘Massive’ Tariffs
Posted June 19, 2018 9:53 p.m. EDT
What Was Said
“There was a story two days ago, in a major newspaper, talking about people living in Canada, coming into the United States, and smuggling things back into Canada because the tariffs are so massive. The tariffs to get common items back into Canada are so high that they have to smuggle them in. They buy shoes, then they wear them. They scuff them up. They make them sound old or look old.”
— President Donald Trump, speaking Tuesday to the National Federation of Independent Business.
This requires context.
Trump is almost certainly referring to — and distorting — an opinion piece by Isabel Vincent, a Canadian journalist, that was published last week in The New York Post about how she and her relatives skirted duties by sneaking jeans, shoes and other goods across the border from the United States.
Vincent described how her nephew hid two pairs of expensive Italian shoes in his backpack to ferry them to a designer based in Toronto. She wrote that an acquaintance removed the price tags and made new outdoor equipment look dusty to smuggle in what “he simply couldn’t find in Canada.”
While Vincent is probably neither the first nor last person to have smuggled cheaper or rare goods into Canada (as a few Twitter users have admitted) the vignette does nothing to bolster Trump’s current dispute with Canada over renegotiating the North American Free Trade Agreement, which he has long denounced as unfair to the United States.
Under NAFTA, Canada does not impose tariffs on footwear made in the United States. Nor does the U.S. tax shoes imported from Canada.
The U.S. charges an average rate of 11.9 percent on imported footwear from most other countries that do not have trade agreements with it. Tariffs can be much higher. And Canada imposes tariffs, usually from 11 to 20 percent, on shoes made in most other countries.
A free trade deal that Canada signed with the European Union, however, would effectively erase duties on most European footwear imports like Italian shoes.
“The president seems misinformed about footwear trade,” Matt Priest, the president and chief executive of the Footwear Distributors and Retailers of America, said in a statement. “Canadians have no real reason to ‘smuggle’ their shoes because their government is already helping lower their costs through proper trade deals.”
Source: Canadian Border Services Agency, Pew Public Trusts, The New York Post, Footwear Distributors and Retailers of America.