Tariff Duties on Imports from Japan

Imported Japanese Motorcycles Enter Canada Duty Free

Oct 17, 2009

6.1% Tariff on Mini Cars from Japan, Team Abundo (Flickr)

Vehicle tires exported from Japan to Canada have the highest tariff rates yet made-in-Japan construction equipment and industrial robots are duty free.

The top 25 Japanese products exported generated US$8.2 billion of Japan’s total $14 billion in sales to Canada during 2008.

This analysis presents rates for customs tariff duties that Canada Border Services Agency (CBSA) imposes on the top 25 product categories imported from Japan.

While Canada requires tariff payments on over 60% of the value of its top 25 imports from the Land of the Rising Sun, 15 of Japanese product categories mentioned below require no customs duty at all.

Highest Tariff Duties on Japanese Imports

Because Japan and Canada have not signed a preferential tariff agreement, Japanese imports are covered under the generic tariff classification known as Most Favored Nation (spelled Most Favoured Nation in Canada).

Presented below are Canada customs tariff rates for 10 of the most popular imported Japanese products in 2008 that are subject to Canadian tariffs. The 6-digit international tariff classification code is shown within brackets.

In total, these categories represent about $5.2 billion worth of made-in-Japan products on which the CBSA assessed customs duties.

7% duty on car tires (code 401110) … US$138.6 million in 2008 sales
7% duty on bus and truck tires (401120) … $76.7 million
6.1% duty on small passenger cars (870323) … $2.8 billion
6.1% duty on medium and large-size cars (870324) … $840 million
6.1% duty on smaller cars (code 870322) … $787.3 million
6.1% duty on mini cars (870321) … $113.9 million
6% duty on vehicle body parts and accessories (870829) … $149.3 million
6% duty on motor vehicle parts (870899) … $111.1 million
6% duty on motor vehicle engines (840734) … $97 million
2.5% duty on pressing, stamping or punching tools (820730) … $174 million.

Duty-Free Imports from Japan into Canada

The 15 product classifications below represent some of the largest and fastest-growing imported products from Japan in 2008. Yet while these leading imports total about US$3 billion in sales for Japan, Canada generates no tariff revenues from these Japanese-made goods.

The list is sorted based on imports with the highest sales in 2008.

Digital cameras, TV cameras and video recorders (852580) ... US$389.4 million in 2008 sales
Other parts and accessories for printing machinery (844399) … $378.5 million
Mechanical shovels and excavators that can revolve 360 degrees (842952) … $377.4 million
Airplane and helicopter parts (880330) … $356.8 million
Motor vehicle axles (870850) … $289.9 million
Motor vehicle transmissions (870840) … $207.6 million
Printed circuits (853400) … $145.2 million
Other wheeled tractors (870190) … $139.9 million
Parts of construction machinery including cranes (843149) … $106.9 million
Industrial robots (847950) … $96.1 million
Other machines and mechanical appliances (847989) … $92.3 million
Lenses for cameras and projectors (900211) … $87.6 million
Larger motorcycles (871150) … $85.2 million
Computer parts and accessories (847330) ... $83.8 million
Iron or steel rails (730210) … $75 million.

Canadian Businesses Pay for Japan’s Competitive Advantages

Given the large distance from the island of Japan to Canada, one might reasonably expect high shipping charges to deliver heavy-duty equipment such as motorcycles, tractors, mechanical shovels and other construction machinery to Canada.

Shipping charges are passed onto Canadian businesses that buy the imported Japanese products.

However, the Canadian government does not collect any tariffs for these heavy-duty imports that would otherwise counterbalance these shipping costs.

In addition, Canada foregoes employment opportunities. If there were modestly higher tariffs on Japanese products, Japanese executives would have to seriously consider setting up local manufacturing sites in Canada to offset high shipping costs combined with more expensive tariffs.

Sources: Industry Canada's Trade Data Online, based on Statistics Canada reports as of October 15, 2009 and Canada Border Services Agency's online customs tariff manual.

The copyright of the article Tariff Duties on Imports from Japan in International Tariffs is owned by Daniel Workman. Permission to republish Tariff Duties on Imports from Japan in print or online must be granted by the author in writing.