Building resilience in the face of trade disruption
The recent trade landscape has been significantly impacted by tariffs between the U.S. and Canada, impacting over 80% of businesses. Tariffs, which are taxes imposed on imported goods, serve various purposes, including protecting local industries and influencing trade balances. They can encourage consumers to buy domestic products by making imports more expensive, but they may also lead to higher prices for consumers and provoke retaliatory measures from other countries, resulting in trade disputes.
KPMG is committed to supporting and empowering the Canadian business community in transforming challenges into avenues for growth. By embracing a proactive approach and strategically optimizing your business strategies, you can pave the way for long-term success and sustainability.
80% of business leaders say they will be impacted by U.S. tariffs
Latest insights
June 26, 2025
Canada is taking steps to protect its steel and aluminum industries with plans to “adjust counter-tariffs” on steel and aluminum products on July 21, aligning with the 30-day trade deadline agreed upon at the G7 summit. The unspecified adjusted tariff rate would be at a level “consistent” with the progress of trade negotiations. Detailed measures include:
- Limiting federal procurement policies to favour Canadian suppliers and “reliable trading partners” by June 30
- Limiting the amount of steel that enters Canada and implementing retroactive quotas that will apply to all non-free trade countries
- Adopting additional tariffs over the coming weeks to address global overcapacity and unfair trade in the steel and aluminum sectors
These steps, along with the newly established trade deadline aim to protect Canadian workers and industries from excessive global production and inequitable trade practices.
Insights provided by Joy Nott and Angelos Xilinas
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Implementing a proactive trade strategy
In the current environment, it is highly important to proactively assess current business strategies, structures and supply chains to mitigate risk and build resiliency.
Utilize trade data to gain a comprehensive understanding of the current landscape, including potential impacts and opportunities. This information can help pinpoint specific products or materials that are most susceptible to tariff increases and assess their effects on revenues, operations, and partnerships. By grasping the potential impact of tariffs on costs, companies can adopt cost-saving measures to sustain profitability.
Prioritize targeted operating outcomes to develop a response strategy model and scenario evaluation:
Diversify supply chains: By improving supply chain visibility, companies can better understand their operations and consider alternative suppliers located in countries with fewer tariffs, which can help reduce the risks of disruption. Additionally, enhancing resiliency through scenario planning and data-driven decision-making will enable proactive planning for future challenges.
Tariff exclusion process: Some tariffs allow for exclusions that fit the eligibility criteria. Companies can request exclusions for specific products, requiring detailed justifications and documentation.
Strategic transfer pricing: Transfer pricing plays a significant role in customs valuation, as it can directly impact the amount of tariffs paid. By establishing a lower transfer price, businesses may be able to reduce their tariff liabilities.
Evaluate contracts and partnerships: Conducting a thorough review of contracts related to customs duties and tariffs to understand obligations between parties can provide opportunities for cost reduction and improved compliance.
Country-of-origin rules: Assess the application of these rules in your operations.
The Canadian government introduced the tariff remission process as support for businesses impacted by tariffs. Collect the necessary information and submit an application for tariff recovery on goods imported from the U.S. for qualifying entities under the Canadian tariff remission process. These entities can recover tariffs if the goods cannot be sourced from Canada.
Access to insightful trade intelligence will be critical for businesses to stay informed and allow them to proactively adjust their strategies and operations. This monitoring will help minimize unexpected costs and disruptions, ensure compliance, and maintain competitive advantage in the global market. KPMG professionals can support with ongoing monitoring and guide you on how changes could impact your company.
A comprehensive approach to your trade strategy
KPMG Tax, Legal and Advisory leaders can help provide comprehensive support on tariffs and key considerations for navigating the path ahead.
Optimize supply chains, mitigate impact and recover applicable tariffs
Assess structures and policies to reduce tariff liabilities
Enhance resiliency to enable business continuity
Evaluate and manage enterprise risks and compliance obligations
Evaluate contracts and partnerships to understand obligations
Optimize capital and strategic restructuring to endure challenges
Manage productivity, risk, and change in the short through long term
Have a question for our team of professionals?
As Canada pulls together to address these uncertain times, KPMG teams can help equip you with the insights you need to make informed decisions on what’s best for your business. Contact us today.
Events
Watch
Tariff disruption: Responding with resilience
April 9, 2025 | KPMG in Canada
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Talking tariffs: Key considerations for private companies
Mar 26, 2025 | KPMG International
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The tariff impact: Insights from Canadian businesses on building resilience
Feb 25, 2025 | KPMG in Canada
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Navigating cross-functional tariff complexities
Feb 12, 2025 | KPMG International
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Navigating the new administration’s key trade policies
Feb 6, 2025 | KPMG U.S. webcast
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U.S. Tariffs: Urgent implications for businesses in British Columbia
Feb 5, 2025 | KPMG in Canada
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Inbound distribution in the US in 2025: The year of tariffs and Amount B
Feb 4, 2025 | KPMG U.S. webcast
Watch
The tariff impact: Navigating cross-functional tariff complexities
Jan 28, 2025 | KPMG in Canada
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About the KPMG in Canada Tariffs Survey
KPMG in Canada surveyed 602 Canadian business leaders between February 13 and February 28 on Sago's premier business panel, using Methodify's online research platform. Eighty-nine per cent export to the U.S. and 80 per cent said they will be impacted by U.S. tariffs. Annual revenue breakdown: 26 per cent, between $500 million and $1 billion, 26 per cent, between $100 million and $500 million, 19 per cent, between $50 million and $100 million, 16 per cent, between $10 million and $50 million, and 13 per cent, more than $1 billion. No companies under $10 million in annual revenue were surveyed.