As the March 4 deadline looms, Canadian companies are scrambling to prepare for the potential imposition of steep tariffs by the United States under Donald Trump’s latest trade policy. With tariffs of 25% on all Canadian goods and 10% on energy products set to take effect, businesses across industries are working overtime to mitigate the fallout.
Customs Brokers on the Front Lines
For customs brokers like Steve Bozicevic, CEO of A&A Customs Brokers in Toronto, the past month has been a flurry of activity. Canadian companies are frantically inquiring about Harmonized Tariff Schedule (HTS) codes—the 10-digit identifiers crucial for determining duties on cross-border shipments.
- “I wake up to at least ten emails every day asking which HTS code to use,” Bozicevic said. “This was almost unheard of before.”
Historically, Canadian companies have enjoyed relatively frictionless, duty-free trade under NAFTA and the CUSMA (Canada-United States-Mexico Agreement). However, with tariffs imminent, businesses now face an urgent need to correctly classify their goods to minimize duties, comply with evolving regulations, and avoid costly penalties.
From HTS Codes to Crisis Management
The incoming tariffs require not only correct product classification but also a clear understanding of who pays the duties and how payments will be made. Many exporters don’t have direct accounts with U.S. Customs and Border Protection (CBP), leaving them scrambling to establish these accounts ahead of March 4.
- “The U.S. won’t allow trucks to cross unless they know who’s paying the duties,” Bozicevic warned. “This has turned into a logistical and regulatory crisis for many companies.”
No Sector Left Untouched
According to Wendy Wagner, a partner at Gowling WLG specializing in international trade, “No goods-based sector is insulated from these tariffs.” Everything from automotive parts and agricultural goods to industrial components and energy exports will be impacted.
Companies Exploring Workarounds and Strategic Shifts
The tariff threat has prompted Canadian businesses to rethink not just shipping logistics but overall operational strategies. Tyler Gompf, co-founder of Manitoba’s Global Drain Technologies, opened an account with CBP and designated his firm as the importer of record, ensuring his products will cross the border smoothly despite the added costs.
Creative Classification
Some companies are looking for flexibility in product descriptions to minimize duties. For instance, a company selling rubber floor mats might previously have classified them broadly as rubber articles; now, they may choose a narrower classification such as finished floor mats, potentially attracting a lower tariff rate.
Retaliatory Measures Add Further Complexity
Canada has vowed to retaliate with its own 25% tariffs on $155 billion of U.S. goods. Ottawa’s response will occur in two phases, starting with food, appliances, apparel, pulp, and paper, followed by vehicles, aerospace products, steel, aluminum, and various food products three weeks later.
This tit-for-tat escalation could increase prices for both Canadian and American consumers, adding more uncertainty for businesses trading across the border.
Supply Chain Reconfiguration and Local Investment
Longer-term solutions include setting up U.S. operations to avoid border tariffs entirely. Mackenzie West, market development director at GHY International, said companies are increasingly investigating options to open warehouses or even manufacturing sites within the United States.
Kala Therapy, a Toronto-based red-light therapy product manufacturer, is already shifting more inventory to U.S. warehouses to reduce potential disruption and control fulfillment costs. CEO Cam Stajer is also diversifying sourcing to avoid exposure to North American tariffs entirely.
Leveraging Trade Loopholes
Some companies are exploring complex strategies like “first-sale for export” pricing, a rule allowing tariffs to be calculated based on the price between the original manufacturer and middleman—rather than the final sale price. Though cumbersome and requiring meticulous compliance, this strategy could soften the blow for high-value goods.
Delaying U.S. Expansion Plans
For others, the uncertainty means hitting pause on expansion into the U.S. market. Beck’s Broth, a Guelph-based bone broth maker, delayed its U.S. launch to reassess pricing and supply chain options in light of looming tariffs.
Similarly, Saltwinds Coffee from New Brunswick is refocusing efforts on the Canadian market, seeing greater certainty and less friction domestically. According to co-founder Laura Richard, American buyers have cooled on stocking Canadian brands due to the unpredictable political and trade climate.
From Crisis to Resilience
The collective uncertainty has fueled deeper introspection among Canadian exporters. Many are revisiting supply chains, diversifying markets, and investing in digital trade infrastructure to navigate a rapidly shifting landscape.
Don Thompson, CEO of Beacon Commerce, said 25% of his clients are accelerating efforts to source locally within the U.S., while the rest are doubling down on domestic Canadian growth until conditions stabilize.
Long-Term Uncertainty
Even if Trump’s tariffs fail to materialize, the threat itself has permanently changed the way Canadian companies think about cross-border trade. As Kristen Hopewell, Canada Research Chair at UBC’s Liu Institute for Global Issues, put it: “North America’s integrated market is clearly in jeopardy.”
With memories of past tariff battles still fresh and uncertainty over future U.S. trade policies, Canadian exporters are embracing resilience and adaptability as permanent business imperatives.
Stay tuned to Skillings Mining Review for further updates on global trade shifts, tariffs, and the evolving strategies of Canadian exporters.
