Tariffs and Trade Policy Resource Centre

Navigating new global tariffs: How companies can manage evolving trade relations

Companies operating in North America are under pressure from new trade measures. Business leaders are exploring how President Donald Trump’s tariff plan—and ensuing Canadian countermeasures—will affect economic growth, the value of the Canadian dollar, business investment and deals activity. Additionally, they’re monitoring the impact on the US economy and its effects on their business with US customers. In response, Canadian businesses are balancing short- and long-term actions to adapt and mitigate the impact of an evolving Canada-US trade relationship.

Companies that move quickly to align supply chain, tax, customs and financial strategies can better manage risk, avoid unexpected costs and develop new opportunities. Our interconnected economies mean this applies to all businesses in Canada—regardless of whether they trade with companies operating in the US. Businesses affected by US and Canadian tariffs, as well as other trade actions, can consider several operational and financial mitigation measures, including the following:

Performing a comprehensive assessment helps illuminate the full impact of the tariffs and other trade actions on your business. This helps companies develop a holistic strategy that encompasses supply chains, trade and customs, regulations and tax. A scenario analysis helps companies pinpoint their risks and opportunities, informing the development of an effective strategy to address those areas.

Examine potential options, key suppliers and customers, contracts and potential exclusions to address trade and customs challenges.

Review dependencies and use the information for potential supplier negotiations, sourcing, manufacturing and stockpiling decisions.

Evaluate transfer pricing policies and transactional characterizations while considering the overall income tax impacts and opportunities of supply chain decisions, including the mix of income, tax attributes and incentives.

The impact of US tariffs on Canadian industries

We estimate that a 25% tariff on Canadian products would result in approximately $73 billion a year in tariffs. Additionally, a 10% tariff on energy resource products would result in $13 billion worth of tariffs annually.

The most-affected Canadian products include motor vehicle and aerospace products and parts, metal manufacturing materials, chemicals, food items and agricultural products.

Navigating new global tariffs

Impact on Canadian businesses and how to take action

Many Canadian business leaders understand this is not the time for business as usual. There’s a need for immediate action, but no quick fixes. Our 28th Global CEO Survey, while conducted before the full possibility of US trade actions against Canada became apparent, found a growing recognition among respondents of the urgency to invest in long-term competitiveness and productivity growth. In the last five years, 60% of Canadian CEOs have taken a least one significant action to reinvent their businesses. This can include expanding into new markets, acquisitions, shifting production to other countries and adjusting product portfolios.

It’s unclear how long these trade measures will last. But by combining the right strategy, structure, culture and technology, organizations can reimagine how they create, deliver and capture value, helping them lead through disruption.

Our highly connected teams across Canada, the US and Mexico are collaborating to help companies manage their immediate challenges and prepare for what’s next. Many companies are discovering that tariff adjustments can lead to significant cost increases across their supply chain. Our proprietary Tariff Impact Assessment (TIA) tool can quantify the exact dollar exposure of potential tariffs specific to your organization as part of a comprehensive scenario analysis. This tool can uncover hidden risks and opportunities, providing a clear picture of potential costs and strategies to mitigate risks. We’re combining our TIA tool and other technologies with our deep industry knowledge and specializations in tax, trade, corporate structuring, deals, data and economics to create an integrated approach that helps organizations navigate the uncertain times ahead. 

We’ve created our Tariffs and Trade Policy Resource Centre to provide businesses with materials and insights to help assess and manage the impact of new tariffs across North America. Read our articles and analysis below or reach out to our team to discuss how companies can navigate the changes ahead.

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