In the U.S., cross-border commerce to both Canada and Mexico dropped amid volatile tariff policies, Signifyd data shows.
Sales revenue from U.S. retailers to Canadian delivery addresses fell 5% year over year in March, according to the fraud-prevention technology provider.
“Retailers’ sigh of relief over a pause in the Trump Administration’s tariffs might be short-lived,” said Mike Cassidy, head of public relations and storytelling at Signifyd. “We found that the uncertainty around tariffs could be as damaging as the tariffs themselves. Our Q1 data shows significant to steep declines in sales from U.S. merchants to consumers in Canada, Mexico and Europe compared to sales within those geographies.”
Signifyd is a payment security and fraud prevention company. 231 of the Top 2000 retailers in North America use it. Moreover, those 231 combined for more than $232.38 billion in 2024 online sales. The Top 2000 is Digital Commerce 360’s database ranking the region’s largest online retailers by their annual ecommerce sales.
How tariff policies are hurting cross-border commerce
U.S. tariff policies are affecting imports from both Canada and Mexico, with some exceptions, reducing cross-border commerce from both countries.
In Q1, Cassidy told Digital Commerce 360, year-over-year online retail sales from the U.S. to Mexican consumers declined 31%. Online sales to Canadian customers fell 6%. Extending outside the continent, online sales to customers in Europe and the U.K. declined 12%.
Meanwhile, he added, domestic sales from merchants within those regions — to customers in the same geography — “handily outperformed” U.S. merchants’ cross-border sales. For example, online sales from Canadian merchants to Canadian addresses increased 1% year over year in Q1.
U.S. retailers’ sales to Canada fell 4% year over year in March, Signifyd data shows. That continued into the first few days of April, when those sales fell 7% year over year.
Yet March online sales from Canadian merchants to Canadian addresses grew 6% year over year.
“This portends that U.S. ecommerce merchants are hardly out of the woods given the prolonged uncertainty the on-again-off-again tariffs create,” Cassidy said.
In the U.S., Signifyd data shows, electronics and general merchandise ecommerce sales decreased 8% and 6%, respectively, in March.
The largest retailers have already strategized and begun implementing changes in response to tariff policies, said J. Bennett, chief customer officer at Signifyd. Among those strategies are price increases.
Those price changes put pressure on consumers — especially in an already challenging macroeconomic environment.
How tariffs impact fraud in ecommerce
There are two key types of fraud impacting retailers today, Bennett told Digital Commerce 360.
One is what he called “actual financial fraud.” In that example, someone steals someone else’s credit card information and uses it.
The other example is called “first-party fraud,” referring to when a consumer is unhappy with an order and files a chargeback or a return. That second type has more than doubled from pre-COVID to today, Bennett said.
“The No. 1 problem that retailers are facing right now is abusive returns and this first-party abuse,” Bennett said.
He added that as unemployment ticks up, professional fraud rings also tick up.
“People will turn to those types of activities,” he said. “They move kind of inversely. The better the economy, the better the consumer sentiment, the less fraud there is, and the less abuse there is.
When consumers feel pinched, they sometimes turn to credit-risking behavior, such as buy now, pay later (BNPL) options, Bennett said. Retailers can protect against that by really thinking carefully about which of their product sets qualify for those types of financings, he said. The Signifyd clients who struggle the least with that aspect think about who their customers are in a more holistic way, he added.
“What can they afford? How do I know what they can afford or not? And what type of payment options and terms do I offer those folks?” Bennett said. “That’s a very adult, long-lasting way to think about that approach as opposed to: Let me make every single sale that I possibly can, offer them a credit card, push them towards buy now, pay later, whatever the case may be.”
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