Amazon And Walmart Third-Party Sellers Reportedly Stash Products In Canada To Dodge Trump Tariffs — Risky Bet Or Bold Move?

As U.S. tariffs on Chinese imports continue to soar, Amazon.com, Inc. AMZN and Walmart Inc. WMT third-party sellers are reportedly shifting stock to Canada, betting that the trade war will soon end in their favor.

What Happened: These vendors, who sell everything from dog toys to electronics, have begun routing shipments from China to Canada, where they can store goods in duty-free zones for a limited period, reported the Financial Times on Tuesday. 

Suppliers for brands like Walt Disney Co. DIS are also reportedly adopting the same strategy, the report said, citing half a dozen sellers, logistics providers, and consultants.

The strategy of storing goods in Canada, which leverages tariff-free warehouses, tax breaks, and rebate programs, adds an estimated $500 to $600 per shipping container in extra expenses for sellers. Still, many view it as a calculated risk, hoping the U.S. will eventually ease the high tariffs on Chinese imports.

 "If we trust the U.S. administration … [and] that's still a big if, this is the worst it's going to get. And so we're prepared to wait this out," one senior executive at a major third-party seller on Amazon and Walmart told the publication. "This is not going to last forever."

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Why It's Important: Nathan Strang, director of ocean freight at Flexport, cautioned that storing inventory in Canada comes with added costs and may ultimately backfire if sellers still need to bring those products into the U.S. while tariffs on Chinese imports remain in effect, the report noted.

“It could wind up being an added expense on top of a tariff that you're going to have to pay anyway,” Strang told the publication.

On Tuesday, President Donald Trump announced plans to significantly lower the steep tariffs on Chinese imports, though he mentioned that "It won't be zero."

Trump had imposed a 145% import tax on goods from China, prompting Beijing to retaliate with a 125% tariff on American products.

Price Action: Amazon shares climbed 3.50% on Tuesday, while Walmart saw a 2.64% gain, according to Benzinga Pro.

Walmart holds a growth score of 54.86% in the Benzinga Edge Stock Rankings. Click here to see how it stacks up against Amazon and other major e-commerce players.

Photo Courtesy: Hadrian on Shutterstock.com

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Disclaimer: This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.