Adapting to Tariffs: Practical Steps for Canadian Businesses
In March 2025, tariffs disrupted years of smooth trade between Canada and the US, directly affecting $30 billion worth of exports (1) and countless Canadian businesses. If you’re a Canadian business leader, here are practical steps to help your organization adapt to this new trade reality.
The New Trade Reality
Tariffs mean higher costs, unreliable supply chains, and tough competitive pressures. The existing 25% tariff (1) sharply raises expenses. Exporters face less competitive products and integrated supply chains.
For Canadian businesses, delaying action means losing customers, revenues, and opportunities. On the other hand, taking strategic, proactive steps right now can set you up for success, whatever comes next. If your business is at risk from trade disruptions, these are the proactive steps you can take today.
Immediate Actions to Take Now
Here’s your short-term action plan:
- Strategically Adjust Prices: Determine which tariff costs you can pass to customers and which you must absorb to maintain competitiveness.
- Aggressively Cut Costs: Aim for 15-20% operational savings through smarter logistics, renegotiating supplier contracts, and optimizing internal processes.
- Maximize CUSMA Compliance: The exemption of CUSMA-compliant (2) goods from some tariffs has made compliance verification a priority. Invest in understanding Harmonized System (HS) classifications and documenting North American content to qualify for preferential treatment.
- Secure Support: Access government resources, including Export Development Canada's $5 billion Trade Impact Program (3) and Business Development Bank of Canada's flexible loans (4).
Build Long-Term Resilience
The most innovative companies will use these tariff challenges as an opportunity to fundamentally strengthen their operations:
- Reconfigure Supply Chains: Shift critical components sourcing to reliable Canadian suppliers and regionalize your supply network.
- Accelerate Tech Investment: Implement automation, robotics, predictive maintenance, and data-driven manufacturing to reduce costs.
- Seize Domestic and Non-US Market Share: Canadian consumers and businesses prefer Canadian-made products to avoid US tariffs.
- Diversify Export Markets: Pursue markets beyond North America, such as Europe, to safeguard your business against future trade volatility.
Your Next Move: Support Is Available
You’re not alone. Government and industry support are available to help you adapt quickly. Explore the complete list of supports available to you, like:
- Financial Assistance: Immediate relief and government support
- Expert Advice: Tailored advisory services for your unique challenges
- Tools and Resources: Practical solutions for workforce development, employment support, and more
Navigating tariffs presents significant challenges for Canadian businesses, and the pressure you’re experiencing is real. Your immediate steps, such as adjusting prices, managing costs, and leveraging available support, will address those short-term pressures. At the same time, investing in robust supply chains, technological innovation, and new market exploration will help fortify your business against future trade disruptions. Support is available. Reach out, plan strategically, and position your business to withstand the challenges of today and prepare for tomorrow’s uncertainties.
References
1 Government of Canada. "Canada’s Response to U.S. Tariffs." Canada.ca. https://www.canada.ca/en/department-finance/programs/international-trade-finance-policy/canadas-response-us-tariffs.html
2 Government of Canada. "CUSMA Compliance." TradeCommissioner.gc.ca. https://www.tradecommissioner.gc.ca/united-states-of-america-etats-unis-amerique/cusma-compliance-conformite-aceum.aspx?lang=eng
3 Export Development Canada. "Trade Support for Canadian Companies." EDC.ca. https://www.edc.ca/en/campaign/trade-support-canadian-companies.html
4 Business Development Bank of Canada. "Special Support: Tariffs." BDC.ca. https://www.bdc.capecial-support/tariffs