{"id":1643,"date":"2026-08-25T06:36:47","date_gmt":"2026-08-25T06:36:47","guid":{"rendered":"https:\/\/nationallogisticspost.com\/?p=1643"},"modified":"2026-08-25T06:36:47","modified_gmt":"2026-08-25T06:36:47","slug":"mark-carneys-smugglers-blues","status":"publish","type":"post","link":"https:\/\/nationallogisticspost.com\/?p=1643","title":{"rendered":"Mark Carney\u2019s Smuggler\u2019s Blues"},"content":{"rendered":"
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B<\/span>rabim Karki\u2019s piece here at The American Spectator<\/em> on Monday about the breakoff in trade talks between the U.S. and Canada is a must-read, though it\u2019s a little incomplete (and this column is an attempt to fill in a gap). Karki notes, and quite accurately so\u2026<\/p>\n

Read more Trump\u2019s Nixon Playbook: Squeeze Iran, Dare China to Blink<\/a><\/p>\n

\n

Trump\u2019s tariffs are not an act of aggression against an ally. They are the predictable consequence of a negotiation in which one side finally stopped accepting asymmetrical terms it had tolerated for years.<\/p>\n

The asymmetry Trump is pointing to is real, not invented. Canadian dairy tariffs on U.S. products have run well above 200 percent under the country\u2019s supply management regime, even as Canadian goods flow south with comparatively modest friction. American dairy farmers in Wisconsin and New York have complained about this for a generation, through Republican and Democratic administrations alike. Trump did not manufacture this grievance. He inherited it and, unlike his predecessors, chose to act on it rather than manage it quietly. Carney\u2019s own advisers have not seriously disputed that the tariff wall exists; they have argued only that dismantling it now would be politically costly at home. That is an argument about Canadian domestic politics, not about whether the American complaint is legitimate.<\/p>\n

The walkout itself weakens Canada\u2019s position more than it strengthens it. Carney told reporters the American side \u201casked too much and offered too little,\u201d then pulled his negotiators from Washington and out of what by his own account had been a week of real progress. U.S. Trade Representative Jamieson Greer\u2019s account is less charitable: Canada, he said, backed away from terms it had already agreed to. Whichever version proves closer to the truth, walking away rewards Ottawa\u2019s leverage only if the United States needs a deal more than Canada does. It does not. American exports to Canada matter, but Canada sends a far larger share of its own economy south than the reverse. A negotiating partner who breaks off talks from the weaker hand is making a statement, not a strategy.<\/p>\n<\/blockquote>\n

Karki has the tone of the negotiations correct. Canada has stoked anti-Americanism among its population for years, and now Canadians hate Americans as though we\u2019re enemies. It\u2019s hardly a surprise that Mark Carney, the Davos stooge currently running Canada, is treating these trade talks similarly to how Iran treats peace talks with the United States.\u00a0(RELATED: <\/strong>The Inimitable Mr. Carney<\/strong>)<\/strong><\/p>\n

Yes, we\u2019re told, but the fresh round of hostility coming from the U.S. side is an abrogation of trade deals that Donald Trump negotiated.<\/p>\n

Is that true? Well\u2026<\/p>\n

\n

Here\u2019s the key issue: Canada was bringing in Chinese steel and aluminum and selling it as Canadian steel to help China avoid tariffs<\/p>\n

When told to knock it off, they refused. This is why the trade deal collapsed<\/p>\n

We cannot allow China to build a proxy state on our border<\/p>\n

\u2014 Department Of Deportations (@DoDeportations) August 23, 2026<\/p>\n<\/blockquote>\n

Is Canada a transshipment hub for Chinese products into the U.S. market to avoid tariffs? That isn\u2019t an accusation from somebody on X you haven\u2019t heard of (no insult intended to the \u201cDepartment of Deportations\u201d account, of course); it\u2019s the position of the U.S. government, which two weeks ago issued a report on this very problem.\u00a0(RELATED: Carney\u2019s Canada Is China\u2019s Vassal)<\/strong><\/p>\n

From the Executive Summary\u2026<\/p>\n

The United States faces a growing challenge from the illegal transshipment of goods through third countries to evade applicable tariffs and other trade remedies. Exporters in higher-tariff
\njurisdictions can abuse differences in U.S. tariff treatment across countries to route goods through lower-tariff jurisdictions before entering the American market. Illegal transshipment may involve relabeling, repackaging, re-invoicing, minor processing, false country-of-origin claims, or other actions intended to secure tariff treatment that would not apply if the goods\u2019 true economic origin were declared.<\/p>\n

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President Trump\u2019s tariff actions have helped to protect U.S. workers and industry, and his Administration has taken stronger actions against countries that pose larger economic challenges. However, the expansion of differentiated tariffs in 2025 has significantly increased the importance of effective transshipment enforcement. Tariff differentials are necessary to address differences in trading practices and levels of reciprocity, but they also create opportunities for arbitrage and evasion. Any higher-tariff country may seek access to the U.S. market through a lower-tariff country, and any lower-tariff jurisdiction may benefit from serving as a production, processing, warehousing, or logistics intermediary for higher-tariff countries.<\/p>\n

China provides the most developed historical example of this conduct. Following the imposition of Section 301 tariffs in 2018, the direct U.S. trade deficit with China fell in 2019 and 2020. Even today, imports of a number of Chinese products subject to these original duties, like electric vehicles, are much lower in the U.S. than in places like the European Union. But the overall success of these tariffs co-exists with the abuse, by exporters, of the tariff differentials that they contribute to. After their imposition, Chinese exporters increasingly routed goods through third countries. Products that previously moved directly from China to the United States were shipped through jurisdictions where limited assembly, finishing, repackaging, relabeling, or documentation changes could create the appearance of a different national origin. Over time, these practices contributed to the development of a global network of production hubs, logistics platforms, freetrade zones, bonded warehouses, processing corridors, and re-export centers.<\/p>\n<\/blockquote>\n

And from Page 6 of the report\u2026<\/p>\n

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Tariff arbitrage lies at the heart of modern illegal transshipment, the Great Reallocation, and the Shadow Transshipment Network. When a Chinese product facing a high U.S. tariff can be routed through a country with a lower tariff rate, the difference becomes a profit pool. That spread is what turns transshipment from a marginal customs abuse into a global business model.<\/p>\n

For example, ship $1 billion of Chinese goods directly to the United States, and the applicable China-specific tariffs can generate hundreds of millions of dollars in duties, depending on the product mix. Route those same goods through a lower-tariff country and falsely claim a new origin, and much of that duty can disappear. Route them through Mexico or Canada and improperly secure United States-Mexico-Canada Agreement (USMCA) treatment, and the China-specific duty can fall to zero.<\/p>\n

Such tariff arbitrage creates the financial engine behind the Great Transshipment Scam. The savings are more than sufficient to finance the capital equipment, logistics infrastructure, light assembly plants, repackaging operations, and \u201cscrewdriver factories\u201d needed to support the scam across Southeast Asia, Mexico, India, and Eastern Europe. These facilities are designed less for true manufacturing than for origin-shifting, tariff evasion, and tariff avoidance.<\/p>\n<\/blockquote>\n

Now from Page 8\u2026<\/p>\n

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China\u2019s Shadow Transshipment Network is a distributed system of finishing hubs, logistics platforms, processing corridors, free-zone operators, and re-export centers that allow Chinese goods to enter the U.S. market under new national identities. The roughly 40 countries identified as participants in the Great Transshipment Scam can be grouped loosely into three tiers, as shown in Table 1 on the following page.<\/p>\n

Read more Lindsay Clancy and America\u2019s Death Culture<\/a><\/p>\n

For purposes of this report, \u201cChina-linked goods\u201d means goods that are not necessarily declared as Chinese-origin at entry but carry substantial indicia of Chinese economic origin, control, or content. These indicia may include China-origin inputs or components, Chinese ownership or financing, relationships with Chinese suppliers or manufacturers, China-based production steps,
\nChina-origin routing histories, or other trade-flow evidence suggesting that the goods may be part of a China-origin illegal transshipment or origin-shifting scheme.<\/p>\n

Tier 1 consists of the Diversified Scale Leaders: countries and trading blocs that account for large absolute volumes of China-linked goods while maintaining diversified industrial bases and major U.S.-bound export platforms. In these jurisdictions, illegal transshipment risk is embedded within broad legitimate trade flows. Tier 1 includes Canada, the European Union, India, Israel, Japan, Mexico, South Korea, and Taiwan.<\/p>\n<\/blockquote>\n

Yes, you are reasonable to ask why Canada is being singled out among several Tier 1 countries participating in this scam, which the White House refers to as \u201csmuggling disguised as trade.\u201d But consider that this is going on at the same time the Canadians are running a slew of anti-competitive trade practices across a host of industries. Canadian dumping has more or less destroyed the U.S. timber industry, for example, and the attacks on dairy products, alcohol, and a number of other industries have been meticulously documented. That Canada is a poor trade partner is hardly in dispute.<\/p>\n

\n

There are multiple avenues for Trump to take. Two easy ones relate to exiting CUSMA (USMCA).<\/p>\n

First, is a simple termination notification, due to current trade conflict.<\/p>\n

Second, is a termination notification, due to the FTA Canada signed with China (specifically on autos).\u2026 https:\/\/t.co\/qZitndMker<\/p>\n

\u2014 TheLastRefuge (@TheLastRefuge2) August 24, 2026<\/p>\n<\/blockquote>\n

Even so, but for Canadian oil exports, the U.S. would run a trade surplus with Canada. That gives you the relative position of the two.<\/p>\n

And yes, Canada is threatening to stop the flow of oil and gas to the U.S. as part of this trade war. But there is a problem with that\u2026<\/p>\n

\n

The average Canadian has never looked at a map of their own country.<\/p>\n

Line 9, which supplies nearly all of Ontario and Quebec with their oil, runs through the United States before re-entering Canada through Southern Ontario.<\/p>\n

Years ago, the Canadians had an opportunity to\u2026 https:\/\/t.co\/EaXsy1Lsvn pic.twitter.com\/L25NrTL4jb<\/p>\n

\u2014 Christian Heiens \ud83c\udfdb (@ChristianHeiens) August 24, 2026<\/p>\n<\/blockquote>\n

They could have built a west-to-east pipeline such that stopping the flow of oil and gas to the United States wouldn\u2019t destroy their own economy. They didn\u2019t. And unless they want to pack the rail lines with oil trains, this is a very hollow threat.<\/p>\n

It should be remembered that the tariffs President Trump is threatening against the Canadians don\u2019t kick in until Jan. 1. He\u2019s deliberately building a long runway to allow Carney and his minions to quietly return to the table and negotiate something acceptable to the U.S. position. Perhaps both sides are guilty of more bluster than is necessary.<\/p>\n

But Canadian behavior is a real issue which does deserve address. Allowing Canada to become China\u2019s transshipper of choice, whether it\u2019s for steel and aluminum or for fentanyl and birth tourism, is not something our interests can allow.<\/p>\n

Better a hot summer of angry talk and cooler heads prevailing later this year than continuing to permit Chinese smuggling through ports run by hateful, deceitful, anti-American Canadian leftists.<\/p>\n

Read more Economic D-Day<\/a><\/p>\n

READ MORE from Scott McKay:<\/strong><\/p>\n

Scott McKay\u2019s\u00a0The Necessary Men<\/i>\u00a0\u2014 Episode 4: Landfall<\/strong><\/p>\n

The Spectacle<\/i>\u00a0Ep. 4-7: How Jayden Daniel\u2019s Momager Destroyed His Football Career<\/strong><\/p>\n

Five Quick Things: Is the Lindsay Clancy Case a Windfall for the GOP?<\/strong><\/p>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

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