On Thursday, two commissioners from the Federal Maritime Commission announced that the Trump administration has started actions to close a long-standing tax loophole. This loophole allowed cargo to avoid U.S. Harbor Maintenance Tax (HMT) fees when routed through Canadian and Mexican ports.
Commissioners Max Vekich and Laura DiBella stated in a joint message that this action represents a major change in U.S. maritime trade enforcement. They described it as addressing a significant issue that has distorted cargo flow and affected competition among ports.
“We appreciate the Administration for taking steps to close the land border loophole which threatens the U.S. economy and maritime interests,” the commissioners said.
This initiative follows President Trump’s April 9, 2025 executive order, Restoring America’s Maritime Dominance, which instructed the Department of Homeland Security and U.S. Customs and Border Protection to start collecting HMT fees—usually around 10%—on foreign cargo entering the U.S. through land borders. The intention is to stop shippers from avoiding U.S. port fees by sending containers through Canada or Mexico.
For nearly 20 years, this loophole has altered North American trade patterns. The commissioners pointed out that Canadian ports, supported by significant government funding, have built more capacity than needed for local demand while actively targeting cargo heading to the U.S.
“Canadian ports have been taking market share from our nation for almost two decades,” they said.
A 2012 FMC study suggested that closing this tax gap could potentially bring back up to half of U.S.-bound container traffic from Canada’s West Coast ports to American ports. Similar competitive trends have been seen with Mexican ports as cross-border logistics networks have grown.
Vekich and DiBella warned that without action, the loss of U.S. port traffic, investments, and jobs could speed up, especially as new terminal projects are initiated in Canada and Mexico.
“Implementing Section 6 would remove the unfair cost advantage harming our economy and justifying these projects,” they added, noting that expansions in Canada and Mexico might eventually lead to the closure of terminals at U.S. ports.
The commissioners believe that closing the loophole would directly benefit American workers and enhance the competitiveness of domestic ports.
“This move will help stop the loss of maritime jobs to Canada and Mexico and create new job opportunities for U.S. longshore workers, truck drivers, and others, while giving the U.S. maritime industry a much-needed lift,” they said.
The White House has described this policy as a fairness measure to create a level playing field for U.S. ports. A fact sheet indicated that the DHS is instructed to “enforce collection of the Harbor Maintenance Fee on foreign cargo entering the United States to prevent circumvention via Canada or Mexico, ending a long-standing unfair practice.”
The commissioners also mentioned that their statements represent their personal views and do not necessarily reflect the official stance of the Federal Maritime Commission.