Trump Closes Canada-Mexico Transshipment Tax Loophole for US | Alert for Cross-Border E-Commerce Sellers
 
Two Federal Maritime Commission (FMC) commissioners confirmed that the Trump administration has enforced measures to close a decades-long tax loophole, which previously allowed cargo transshipped via Canadian and Mexican ports and entering the US by land to evade the US Harbor Maintenance Tax (HMT) of around 10%.
 
This move is in line with Section 6 of the Revitalizing American Maritime Leadership executive order signed by Trump on April 9, 2025, requiring the Department of Homeland Security and US Customs and Border Protection to levy the HMT on foreign goods entering the US by land from Canada and Mexico, putting an end to tax evasion through cross-border transshipment.
 
The two commissioners stated that the loophole has reshaped North American trade flows for nearly 20 years: Canadian ports, built with overcapacity via government investment, have targeted US-bound cargo, with Mexican ports forming similar competition, directly causing losses in throughput, investment and jobs at US ports. A 2012 FMC study estimated that eliminating this tax disparity could bring half of US-bound container cargo back to US ports from Canada’s West Coast ports.
 
They warned that inaction would accelerate such losses for US ports, and further expansion of Canadian and Mexican ports could even lead to the closure of US port terminals; closing the loophole would eliminate the artificial cost advantage of Canadian and Mexican ports. They also noted that closing the loophole would benefit US workers, boost the competitiveness of US ports, stem the outflow of maritime jobs, create new opportunities for dockworkers, truck drivers and others, and support the development of the US maritime industry.
 
The White House defined the policy as a fair measure to level the playing field for US ports, tasking the Department of Homeland Security with cracking down on tax evasion via Canada-Mexico transshipment and ending this unfair practice.
 
The two commissioners pointed out that the above comments represent their personal views only and do not necessarily reflect the official position of the Federal Maritime Commission.
 
⚠️ Key Impacts for Cross-Border E-Commerce Sellers:
 
1. Direct cost increases for US-bound shipping routes via Canada-Mexico transshipment
2. Need to reassess North American logistics plans to avoid additional taxes
3. Structural adjustments to the US-Canada-Mexico cross-border logistics landscape