The tariff war is colliding with Amazon's plan for growth in Canada

Amazon is actively pursuing an aggressive expansion strategy in Canada despite headwinds created by an escalating cross-border tariff war between the United States and Canada. According to internal documents, Amazon forecasts that its Canadian package volume will increase by more than 40% between 2026 and 2029, outpacing its percentage growth rate in the US domestic market. However, rising trade barriers present operational complexities for the e-commerce giant. Following the announcement of 50% tariffs on specific Canadian imports and anticipated retaliatory measures from Canada, Amazon has adjusted parts of its Canadian direct-import sourcing from the US to China. These tariffs complicate programs such as Remote Fulfillment, which cross-ships inventory from US warehouses to Canadian consumers. Simultaneously, Amazon faces intense local competition from retailers like Walmart and Best Buy, who deliver within two to four hours to 70% to 85% of Canadian households, compared to Amazon's 54.5% same-day coverage. To remain competitive while managing costs, Amazon is shifting toward lower-cost partner-based delivery models and increasing regional fulfillment infrastructure across Canada.