Episode 76: U.S. Tariffs–How Canadian Business Prepare in Times of Uncertainty

Tech Uncensored - An Altitude Accelerator Podcast

In early February 2025, the United States, under Donald Trump, imposed significant tariffs on Canadian imports. Effective February 4, these tariffs included a 25% duty on general goods and a 10% duty on energy resources from Canada. The stated rationale was to pressure Canada to enhance border security and curb illegal drug flows into the U.S. This, we now know, is a red herring.

The implementation of the proposed tariffs has been subject to multiple delays with threats of retaliations happening in the midst of negotiations between Canadian and US officials. On March 4, the U.S. tariffs were finally enforced, and simultaneously, Canada's first phase of retaliatory tariffs of 25% on $30 billion worth of American exports into Canada had taken effect.

Just two days later, on March 6, Trump announced a delay in tariffs on goods compliant with the CANADA – US - MEXICO Agreement until April 2. This move was in response to the pressure from the CEOs of Ford, General Motors, and Stellantis, who told the president of their grave concerns of tariffs on the auto sector.

Throughout February and March, a continuous cycle of threats and counter-threats persisted between Canada and the US.

On April 2, 2025, several significant events are set to occur in the ongoing trade dispute between Canada and the United States:

1) The U.S. tariffs on Canadian goods, which were partially paused on March 6, 2025, are expected to fully resume. This means that the 25% tariff on all goods from Canada and the 10% tariff on Canadian energy products will be fully implemented.

2) Canada's second wave of retaliatory tariffs is expected to take effect. This includes 25% tariffs on $125 billion worth of US-origin goods imported into Canada.

3) The temporary exemption for Canadian goods compliant with CUSMA (Canada-United States-Mexico Agreement), which began on March 7, 2025, is set to expire.

This has already had reverberations across the Canadian business sector. We are witnessing increased costs, supply chain disruptions, businesses already experience immediate impacts on demand and the resulting loss in market share. Talks of cutting production capacity, reducing workforce and postponing planned business investments are adding to this increased uncertainty.

There are many questions among Canadian small businesses on the revenue implications on their own operations in the short term and to what extent will this impact their survival in the long term. What should they know and what should they do to prepare.

We are pleased to welcome Brigitte LeBlanc LaPointe, Partner specializing in cross-border M&A and venture capital financing, of Norton Rose Fullbright, a global law firm that specializes in key industries including financial institutions, energy, infrastructure, transport, and technology to name a few.

We will be dissecting the legal implications for business when it comes to these US tariffs as Canadians await the arrival of April 2nd, 2025.