Leadership Insights: Global Trade Can Mean New Opportunities for U.S. and Canadian Businesses

I recently participated in a panel discussion as part of the World Mail & Express (WMX) Americas Conference that focused on opportunities for businesses interested in expanding to international markets. The annual conference brings together trade community members from all over the world, representing different aspects of supply chain management. I was impressed by the shared enthusiasm and belief that when it comes to trade opportunities, signs are still flashing green.

This enthusiasm comes at a time when businesses find themselves operating under a cloud of uncertainty, as threats of tariffs and counter-tariffs dominate the world stage. And as Canada implements new tariffs and trade measures, businesses importing goods must stay ahead of regulatory changes to minimize risks and costs.

Recently, my colleague Danny Cipollone; General Manager & Head of Customs Brokerage, Purolator Inc, hosted a webinar alongside Jill Hurley; Senior Director, Global Trade Consulting, United States, Livingston, and Jeff Fraser; Director, Global Trade Consulting, Canada, Livingston, to discuss the latest updates on Canadian import tariffs, including affected commodities in Tranche 1 & Tranche 2, de minimis thresholds, and cost-saving strategies. They also shared ways of navigating these changes with tools like duty relief programs and other mitigation options.

Watch the full webinar below:

Tariffs aren’t the only reason for this sense of uncertainty. A litany of “once in a century” calamities have materialized over the past few years forcing businesses to adapt and re-adapt as never before. This includes of course, dealing with a global pandemic, multiple wars, piracy in the Red Sea, a ship stuck in the Suez Canal, scores of climate-related events, and now an escalating trade war.

As became clear over the course of the WMX conferences, businesses are determined to navigate these challenges and find opportunities amidst the chaos. A few notable trends in global trade include:

The world has embraced e-commerce. Global e-commerce sales surpassed $6 trillion during 2024, marking a nearly 8.5% increase over 2023 levels. E-commerce provides businesses with access to billions of consumers across the globe who are increasingly inclined to shop with international retailers. Payment processing expert PPRO has documented the cross-border buying habits of consumers across the globe, with some notable findings that include:

• Canada: Almost 65% of Canadian online shoppers have made purchases from international sellers, with cross-border sales accounting for 22% of total e-commerce spending. Purchases from the United States account for nearly half of Canadian cross-border purchases, followed by China (32%) and the United Kingdom (4%).
• United States: Cross-border purchases are not as prevalent among U.S. online shoppers. The PPRO research found just over 40% of consumers shopped with an international business, accounting for 16% of total e-commerce. China accounts for roughly half of all cross-border purchases made by Americans, followed by the United Kingdom (12%) and Japan (7%).
• China: China is the world’s largest e-commerce market with nearly 1 billion internet shoppers. Those shoppers account for almost half of all global transactions.
  China is also the largest source of cross-border e-commerce, with nearly 40% of shoppers making an international purchase. Cross-border purchases totaled US$480 billion during 2022 and accounted for 17% of total e-commerce. Japan accounts for the largest volume of cross-border sales, followed by purchases from U.S. sellers.

• India: Developing nations are leading the way when it comes to e-commerce growth. India is at the top of the list with an annual growth rate of 14.11%. During 2022, nearly 850 million consumers shopped online, 30% of whom made purchases from international sellers.
• Europe: Across Europe, discoveries include:
  • Spain: 52% of consumers report shopping with an international seller.
  • France: Almost two-thirds of French online shoppers – 64% – have made an international purchase, accounting for 17% of that country’s total e-commerce volume.
  • Germany: 43% of German consumers report shopping with an international online seller, accounting for 20% of total online sales.
  • United Kingdom: 47% of consumers have shopped cross-border, representing 12% of total e-commerce.

Much of the growth in cross-border e-commerce can be attributed to the accessibility and convenience made possible through global marketplaces. Online platforms including Amazon, eBay, Alibaba (including Taobao and Tmall), Rakuten, and Temu provide businesses with easy access to consumers located throughout the world.  Consider, for example, that most independent sellers on Amazon’s marketplace are small-and-medium-sized businesses. More than 330 million items were exported by U.S.-based sellers during 2023, with products shipped to customers in more than 130 countries globally.

Cross-border e-commerce offers tremendous opportunities for expansion to new markets. Success though, will require careful planning and a good understanding of factors including consumer preferences, market nuances, language preferences, taxes, and customs and regulatory requirements. And critically important, a market entry plan must include a country-specific logistics strategy that ensures on-time deliveries consistent with customer expectations.

Businesses rethinking their reliance on China: When Kearney global management announced its annual Reshoring Index for 2024, it noted that instances of North American businesses shifting production away from Asia had reached the highest levels in more than 10 years. “American, Canadian, and Mexican nearshored and reshored industrial production efforts [continue] to take market share away from manufacturers in LCCRs (Asian low-cost countries and regions) – including mainland China,” the analysis noted.

This insight follows a report from the American Chamber of Commerce in China (AmCham China), that for the first time, a majority of its membership “no longer regard China as a top three investment priority – a place where they should spend money to grow their business.” In early 2025, AmCham China announced survey findings that roughly 30% of U.S. companies operating in China had taken steps to begin relocating manufacturing or sourcing.

For some, the answer has been to shift a portion of production out of China, but not out of Asia, usually to Vietnam, Malaysia, Singapore, or other low-cost countries. Others have returned manufacturing back to North America, with Mexico the primary beneficiary. Still others are choosing to add resiliency by lining up backup suppliers that can be called upon should supplies from China go awry.

Companies considering a change quickly learn there is no single solution. Instead, there are multiple options for addressing a business’s specific needs. Current practices generally include:

• Reshoring. Reshoring occurs when a business returns production to its home country. This is the opposite of offshoring, which occurs when a business moves production to another country, usually to China or another Asian country.
• Nearshoring. Nearshoring is the practice of shifting production or supplier networks to a country located in close proximity to a business’s home country. This is usually done to improve supply chain management. A company that chooses to nearshore will often share a border with the country in which its manufacturing partner is located.
• Friendshoring. Friendshoring is the “new buzzword in the global trade room,” according to the World Economic Forum, and refers to companies choosing partners located in countries with shared values as a way to minimize the risk of supply chain disruptions.
• China-Plus-One. Another option called “China-Plus-One,” occurs when a business moves certain operations to other countries, usually within Asia, while keeping other functions in China. Several Asian nations including Thailand, Singapore, Malaysia, and Vietnam, have positioned themselves to benefit from the shift away from China. These countries have enacted favorable trade policies, improved infrastructure, invested in worker training, and undertaken ambitious marketing campaigns.
  Companies that have moved some production to Vietnam, for example, include Apple, Microsoft, Intel, General Dynamics, Qualcomm, Nike, and Boeing. The U.S. International Trade Administration reports that Vietnamese export volume to the U.S. has surged by 230 percent over the past five years, and the U.S. is now Vietnam’s largest export market.

• Dual-Sourcing. As described by TechTarget, dual-sourcing refers to the practice of using two suppliers for a specific component, raw material, product or service. The practice can be extended to include “multi-sourcing,” in which more than two suppliers are used.

Historic number of Free Trade Agreements. Businesses can avail themselves of benefits offered through free trade agreements (FTAs) to facilitate expansion to new markets. According to the World Trade Organization, as of January 2025, 373 regional trade agreements (RTAs) are in effect worldwide. While the specifics of each agreement vary, FTAs generally eliminate barriers, allow for duty-free trade, and encourage international investment.

U.S., Canadian, and Mexican businesses are most familiar with the United States-Mexico-Canada Agreement (USMCA), which took effect in 2021. But each country maintains additional FTAs that present trade opportunities with other countries.

Canada currently has 15 FTAs that provide access to 1.5 billion consumers worldwide, and more than 60% of the world’s GDP. This includes the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) which facilitates trade between Canada and more than 500 million consumers located throughout 11 other countries including Australia, Japan, Singapore and, most recently, the United Kingdom.

The United States has 14 FTAs in force that affect trade with 20 countries.  Mexico currently has 13 FTAs in place that cover 50 countries.

Each country also maintains “tariff preference” programs with developing countries that establish favorable trade conditions. In the United States, the Generalized System of Preferences (GSP) eliminates duties on eligible products imported from any of the 119 designated countries and territories. Similarly, Canada’s General Preferential Tariff (GPT) program extends tariff preferences to imports from 106 developing countries.

Closer to Home – Highly Integrated North American Trade Relationships

Back in 2020, when the United States-Mexico-Canada Agreement (USMCA) was finalized, U.S. President Donald Trump called the free trade pact “the largest, most significant, modern, and balanced trade agreement in history. And, he added “all of our countries will benefit greatly.”

President Trump was correct in this assessment. The USMCA, along with its predecessor, the North American Free Trade Agreement (NAFTA) has enabled the world’s second largest free trade region, second only to the 15 countries that comprise the Regional Comprehensive Economic Partnership (RCEP). While the RCEP accounts for 35% of global GDP, the three USMCA countries account for 17% of global GDP.

In 2025, as the United States, Canada, and Mexico trade relationship has entered a period of volatility, it’s worth highlighting a few notable successes:

• The United States is Canada’s largest trading partner.
  • In 2023, the United States was the largest buyer of Canadian goods, purchasing 76% of the country’s total exports. The next largest customer was China, which accounted for 4%, followed by the United Kingdom and Japan at less than 3%.
  • USMCA partner Mexico accounts for slightly more than 1% of Canada’s exports, although it retains the title of Canada’s “third-largest trading partner.”
  • The United States also tops the list with regard to imports. U.S. businesses accounted for 62% of Canadian imports, followed by China at 9%, Mexico at 3%, and Germany at 2%.
• Mexico and Canada are the United States’ largest trading partners.
  • In 2022, 17.3% of S. exports went to Canada, with a value of $356.5 billion, followed by Mexico ($324.3 billion), China ($150.4 billion), Japan ($80.2 billion) and the United Kingdom ($76.2 billion).
  • The U.S. was the world’s largest importer of goods during 2022. China was the top source, accounting for 16.5% of all imports, with a value of $536.3 billion. Mexico ($454.8 billion) was second, followed by Canada ($436.6 billion), Japan ($148.1 billion), and Germany ($146.4 billion).
• The United States is Mexico’s largest trading partner.
  • The United States purchased more than three-quarters – about 78% — of all Mexican exports during 2022. Canada was a distant second, accounting for 2.7%, followed by China at 1.9%, and Germany which accounted for 1.4%.
  • The United is also the largest source of Mexican imports. During 2022 the U.S. accounted for 43.8% of goods imported into Mexico, followed by China (19.6%), South Korea (3.7%) and Germany (3.1%).
• The world’s third largest automotive region.
  Today the U.S., Canadian, and Mexican automotive industries comprise the third largest vehicle and parts manufacturing region in the world, behind China and the European Union. While each country maintains a vibrant domestic industry in which most global vehicle and parts manufacturers operate alongside local suppliers, the industry is strengthened by a high degree of cross-border integration. “Across the region, hundreds of suppliers provide thousands of parts for vehicles, some of which cross the border seven or eight times as they are assembled into larger products” explains the Congressional Research Service (CRS). For example, the CRS analysis continues, “some vehicle seats utilize components from four different U.S. states and four Mexican locations, with final assembly in the U.S. Midwest.”

• Other bright spots include aerospace, medical devices, industrial equipment, information technology, oil and gas, construction, and agriculture.

E-Commerce is another important story, especially among U.S. and Canadian consumers. Canada Post found that in 2021, 56% percent of Canadian online shoppers had purchased from a U.S. business. While that number was down from the 64% who shopped with a U.S. site during 2019, the number of purchases made by each shopper nearly doubled to 8.7.

A list of a list of Canada’s top 10 sites include several that will be familiar to U.S. businesses:

1. Amazon Canada
2. eBay Canada
3. Canadian Tire
4. Walmart
5. Costco Canada
6. Kijiji
7. Best Buy
8. Hudson’s Bay
9. Home Depot
10. Etsy

Compare this with the list of top American sites:

1. Amazon
2. eBay
3. Walmart
4. Etsy
5. Target
6. The Home Depot
7. Craigslist
8. Best Buy
9. Wayfair
10. Costco

As the above snapshot makes clear, any changes to the North American trade relationship will have deep consequences. The trade relationship that exists today is the result of decades of negotiations and trial-and-error, and a shared understanding about the importance of free and fair trade. It is truly a unique relationship that has opened many doors for U.S., Canadian, and Mexican businesses. Hopefully those doors will remain open, as discussions continue about the future of the trade relationship

Good logistics practices – More important than ever

As the preceding discussion makes clear, global trade presents tremendous opportunities for U.S. and Canadian businesses. No matter how big or small, or what products you make, there is undoubtedly a market waiting to be tapped. The challenge though, is identifying those customers-in-waiting, and putting together the business strategy – including a solid logistics plan – to ensure seamless and consistent on-time delivery throughout the world.

Today, logistics providers offer smart, innovative solutions that allow businesses to operate at levels of efficiency that were previously unthinkable. Shipments can move seamlessly across the globe, allowing businesses greater flexibility in building their international supply chains and expanding to new markets. But capabilities can vary greatly from one provider to the next.  This makes it essential to do an in-depth review before signing on the dotted line. A few considerations and “must have” capabilities should include:

Geographic Reach

This should be obvious, but make sure a logistics provider services the regions in which your customers are located. This includes service within a domestic market as well as to international suppliers and customers. An increasing number of logistics providers have reduced their coverage areas, forcing businesses to enlist multiple companies to meet their comprehensive needs. This complicates the international shipping process and makes it harder than it has to be.

Canada provides a good example of this.  Most Canadian logistics companies limit service to specific provinces or geographic regions.  For businesses with customers located throughout the country, this often means having to patch together networks of regional carriers.  In some cases, this can mean more than a dozen different providers.  A dozen companies usually mean a dozen different headaches including loss of visibility and accountability, inconsistent service levels, and missed opportunities for cost and efficiencies.

Purolator though, is different. Purolator is an established Canadian brand that does offer comprehensive service throughout Canada.  The Purolator network extends to every province and territory and ensures service to every postal code and address – including remote job sites that aren’t even accessible via paved roads!  With Purolator, shipments remain “in network,” which gives businesses confidence that deliveries will be made on-time and as promised.

Many U.S. businesses enter the Canadian market assuming that a carrier will offer coverage throughout the country.  But as this example makes clear, you should make no assumptions about a carrier’s capabilities.  Instead, commit to finding a provider that meets your specific requirements.

Scope of Services

Another trend is for logistics companies to “specialize” in a certain service capability. A company may offer only freight or LTL services, while others have discontinued their freight services to focus on courier shipments. While this approach may be tenable for businesses with established shipping needs, it is not generally a workable option for businesses with international requirements.

Instead, international shipments require flexibility and resilience that result from access to a broad portfolio of service options managed by a single logistics provider. This can include a full range of air, freight, and courier options that enable a diverse range of delivery standards.

Customized Solutions

Businesses should look to their logistics providers for customized solutions – built just for them – that address their specific needs. In today’s technology-based environment, businesses no longer need to settle for solutions that just don’t add up.

The process should start with an extensive “white board session” in which a logistics provider delves into a shipper’s logistics requirements and business objectives, among other details. The session should result in an exhaustive list that the logistics provider will use to build a customized solution.

• Would a business benefit from having its Canada-bound shipments consolidated for faster, more efficient travel from the United States?
• What about a solution that ensures direct service for shipments moving between Mexico and Canada?
• Maybe a solution that combines air and ground services for time-sensitive deliveries?
• Or maybe a solution that allows a business to fulfill Canadian orders from a U.S.-based distribution center?

The possibilities are just about limitless when a logistics provider has extensive capabilities, and the commitment to helping customers improve efficiency.

Customs Optimization

Qualified logistics providers can help businesses manage their customs obligations by determining opportunities to add efficiency and reduce costs. This is done through a “customs optimization review,” in which a qualified customs expert reviews a business’s shipments and identifies applicable trade benefits and incentives and reviews all documentation to ensure accuracy. Customs optimization is often able to help businesses realize tariff savings, either by identifying eligibility for free trade agreement benefits, or by ensuring that a product is assigned the correct tariff classification code.

Product Returns

Managing international returns requires a thoughtful planning process with accommodations for factors that include:

• Logistics Management. A process for collecting and storing product returns from customers, evaluating each product, and providing the required resolution. This could mean transporting the product back across the border to a designated returns warehouse, bringing the product to a repair or resale facility, or having the product donated or destroyed.
• Customs Management. Returns crossing an international border require compliance with specific customs mandates, including the need for documentation about a product’s initial entry into a country.
• Cost. Not all returns warrant the high cost of international travel. This means a business will have to determine a point at which transporting products – especially damaged goods – is not worth the expense.
• Customer Communication and Visibility. Customers expect the same high levels of visibility and communication with an international return as they do for local returns. Therefore, it’s essential to prioritize communication when developing an international returns strategy.

A late February analysis by the Conference Board of Canada noted that the current U.S.-Canada trade war “has little historical precedent,” which makes it difficult to predict how exactly businesses will be affected. One certainty though, the analysis noted: “It’s a situation where nobody wins.”

This includes, of course, businesses on either side of the border that are caught in the crossfire. As U.S. and Canadian businesses look to manage during this time of uncertainty, global trade offers a tremendous opportunity. Unfortunately though, most businesses do not export. Right now, only about 1% of U.S. small businesses sell to other countries. In Canada, the number is 6%, and 12% for businesses with more than 50 employees. Among those that do export, most limit sales to a single country, usually the United States or Canada.

But given the accessibility of the global marketplace, it may be worth exploring your options. Global trade has opened many doors for businesses worldwide. And despite the current aura of uncertainty, those doors will remain open and accessible to any business willing to commit the time and energy.

Written by Paul Tessy, Senior Vice President, Purolator International