The Hidden War Beneath the Surface: How Charlotte Pipe, Canada, and North America Are Battling Chinese Transshipping
In the vast machinery of global trade, where billions of dollars in goods flow across borders daily, some of the most consequential battles are invisible to the public eye. They don’t erupt in headlines or diplomatic summits, but in customs codes, shipping manifests, and warehouse inventories. These are the quiet wars fought over fairness, sovereignty, and survival.
One such war has been unfolding across North America, reshaping the plumbing and foundry industries and exposing vulnerabilities in trade enforcement. At the center is Charlotte Pipe and Foundry, a century-old American manufacturer, and Canada’s evolving role as both a trade partner and an inadvertent gateway for tariff-evading Chinese goods.
This is a story of industrial grit, legal maneuvering, and geopolitical tension. It’s about how one company’s fight for fair competition revealed a continent-wide challenge and how both the United States and Canada are grappling with the consequences of transshipment, trade fraud, and economic manipulation.
Charlotte Pipe and Foundry: A Legacy Under Threat
Charlotte Pipe and Foundry, founded in 1901 in Charlotte, North Carolina, has long been a cornerstone of American manufacturing. Known for its cast iron and plastic plumbing systems, the company has remained committed to domestic production, resisting the offshoring trend that hollowed out much of the U.S. industrial base.
Its products are essential to infrastructure used in homes, hospitals, schools, and skyscrapers. But in the 2010s, Charlotte Pipe began facing an existential threat. Chinese exporters were flooding the U.S. market with cast iron soil pipe fittings at prices that defied logic. These fittings were being sold at 22% to 360% below fair market value, undercutting U.S. producers and destabilizing the industry.
Investigations revealed that these imports were not just cheap they were subsidized. Chinese manufacturers received extensive government support, including tax rebates, discounted raw materials, and energy subsidies. These advantages allowed them to offer prices that no American company could match without incurring losses.
In 2017, Charlotte Pipe and the Cast Iron Soil Pipe Institute (CISPI) filed antidumping and countervailing duty petitions. After months of hearings and economic analysis, the U.S. International Trade Commission ruled unanimously in their favor in 2018, imposing tariffs to restore fair competition.
It was a hard-won victory but the battle was far from over.
The Rise of Transshipment: A New Form of Evasion
Tariffs are only as strong as the systems that enforce them. And enforcement becomes exponentially harder when exporters use transshipment a tactic where goods are rerouted through third countries to disguise their origin and avoid duties.
After the tariffs were imposed, Chinese exporters began shipping products to countries like Malaysia, Cambodia, and Vietnam. From there, the goods were relabeled and sent to the U.S. as if they originated in those nations. This allowed them to bypass tariffs entirely.
U.S. Customs and Border Protection launched investigations and uncovered widespread fraud. Some “manufacturing facilities” turned out to be empty warehouses or nonexistent businesses. In one case, a supposed Cambodian factory was actually a bus stop. These shell companies existed solely to falsify documentation and reroute goods.
Charlotte Pipe continued to sound the alarm. They worked with customs officials, trade lawyers, and lawmakers to expose these schemes. In 2025, executives testified before Congress, urging stronger enforcement tools, real-time import monitoring, and harsher penalties for violators.
Their testimony helped catalyze a broader conversation about trade fraud, supply chain transparency, and the need for coordinated enforcement across borders.
Canada’s Role: A New Front in the Transshipment Battle
As the U.S. tightened its grip on Chinese imports, Canada became an increasingly attractive route for transshipped goods. With lower tariffs and more lenient enforcement, Chinese exporters began rerouting products through Canadian ports, hoping to avoid U.S. duties and exploit regulatory gaps.
This wasn’t just theoretical it was backed by data and industry reports. Logistics firms across Canada reported a surge in Chinese shipments, especially in sectors like consumer electronics, chemicals, and auto parts. Many of these goods were stored in bonded warehouses, awaiting re-export or domestic sale. Storage costs soared, reaching $1,750 per container per week.
One Toronto-based logistics firm, Stalco, built a business model around this strategy. They helped U.S. companies legally bypass tariffs by routing Chinese goods through Canada and using Section 321 of the U.S. customs code, which exempts shipments under $800 from duties. Companies split large shipments into smaller parcels and shipped them directly to U.S. consumers no tariffs required.
While technically legal, this practice sparked controversy. Critics argued it undermined the spirit of trade enforcement and created an uneven playing field for domestic producers. It also raised questions about Canada’s role in facilitating tariff evasion, whether knowingly or inadvertently.
Canada’s Response: Tariffs, Retaliation, and Strategic Shifts
Faced with growing pressure, the Canadian government began taking steps to address the issue. Ottawa imposed a series of surtaxes on Chinese imports, including:
- A 100% surtax on Chinese-made electric vehicles
- A 25% surtax on steel and aluminum products
- Proposed tariffs on semiconductors, solar panels, and battery components
To help Canadian businesses adjust, the government launched a tariff remission process, allowing companies to apply for relief or refunds under specific circumstances. This aimed to balance enforcement with economic flexibility, ensuring that domestic firms weren’t unduly burdened while supply chains adapted.
But the trade tensions escalated. In retaliation for Canada’s EV tariffs, China imposed a 76% tariff on Canadian canola seeds, severely impacting farmers in Alberta and Saskatchewan. The Canadian government responded with a $370 million support package, including biofuel incentives, crop insurance enhancements, and interest-free loans.
Political leaders were divided. Alberta NDP Leader Naheed Nenshi advocated for diplomatic engagement and multilateral solutions, while federal Conservative Leader Pierre Poilievre called for a hardline stance, including the cancellation of infrastructure deals involving Chinese state-owned firms.
The debate underscored the complexity of Canada’s position: a country committed to open trade, yet increasingly caught in the crossfire of global economic rivalry.
Toward a “Buy Canada” Strategy
Amid these tensions, Canadian officials began exploring a more robust “Buy Canada” policy, modeled after the U.S. “Buy American” framework. The goal was to strengthen domestic sourcing, protect Canadian jobs, and reduce dependence on foreign suppliers especially in strategic sectors like energy, infrastructure, and technology.
Minister Gregor Robertson, who oversees the Canada Infrastructure Bank, acknowledged that Canada must do more to support its own industrial base. He proposed new procurement guidelines, investment incentives, and public-private partnerships aimed at boosting Canadian manufacturing.
This shift reflects a broader recognition that Canada must not only enforce trade laws but also invest in its own capacity to compete. It’s a strategic pivot toward economic resilience, national security, and long-term sustainability.
The Bigger Picture: Transshipment Across North America
Transshipment is not just a Canadian issue it’s a North American challenge. The region accounts for roughly 15.6% of the global container transshipment market, with the U.S. dominating the landscape. Ports like Los Angeles, Long Beach, New York/New Jersey, and Savannah serve as critical hubs for rerouted cargo.
Automation and digital logistics are transforming the sector, but enforcement remains a weak link. Experts estimate that a significant portion of tariff-affected Chinese exports especially low-cost consumer goods are rerouted through Canada. The volume is large enough to strain warehouse capacity, trigger customs investigations, and prompt calls for reform.
Trade lawyers have confirmed that fulfillment centers in Canada are increasingly used to ship Chinese goods to U.S. consumers in small parcels, avoiding tariffs under Section 321. This practice, while legal, undermines the spirit of trade enforcement and raises questions about regulatory coordination between the two countries.
A Battle Worth Fighting
The story of Charlotte Pipe and Foundry, and the broader issue of Chinese transshipping into North America, is more than a tale of trade disputes it’s a reflection of the challenges facing modern economies in an era of hyper-globalization. It reveals how even well-intentioned trade laws can be undermined by evasive tactics, and how enforcement must evolve to keep pace with the ingenuity of those seeking to exploit loopholes.
For Charlotte Pipe, the fight was never just about protecting market share. It was about defending the integrity of American manufacturing, preserving jobs, and ensuring that companies playing by the rules aren’t punished for their honesty. Their battle has inspired other industries to speak out, and their testimony before Congress has helped shape the national conversation around trade enforcement.
Canada’s role in this story is equally complex. As a country committed to open trade and international cooperation, Canada now finds itself at a crossroads. It must decide whether to tighten its enforcement mechanisms and close the backdoor to tariff-evading goods, or risk becoming a conduit for economic manipulation. The recent surge in Chinese shipments, the rise of bonded warehouse strategies, and the use of customs exemptions like Section 321 all point to a system in need of reform.
Ultimately, this is a battle worth fighting not just for Charlotte Pipe, or for Canadian farmers and manufacturers, but for every worker, entrepreneur, and policymaker who believes in the principles of fair competition. It’s a call to action for governments to modernize their enforcement tools, for industries to remain vigilant, and for North America to stand united in defense of its economic future. Beneath the surface of every shipping container lies more than just goods it