Tariffs between Canada and the United States continue to change, creating new questions for Canadian business owners.
Recent U.S. measures include a 10% tariff applying to many Canadian goods entering the United States and additional 50% tariffs announced for certain Canadian products beginning August 19, 2026. Canada also continues to apply counter-tariffs to specified U.S. steel, aluminum and vehicle imports.
The specific impact will vary by product, industry and supply chain. However, tariffs can affect much more than businesses that export directly to the United States.
Canadian companies may experience higher supplier costs, tighter profit margins, changing customer demand and additional pressure on cash flow.
Not sure where your business may be exposed? Use Agile’s Canadian Tariff Impact Calculator to select your industry and explore the potential effects on your costs, margins and cash flow.
What tariffs currently affect Canadian businesses?
Several tariff measures may be relevant to Canadian businesses in 2026.
New 10% U.S. tariff on many Canadian goods
Effective July 24, 2026, the United States introduced a 10% Section 301 tariff on many Canadian products entering the country. Certain products are exempt, and Global Affairs Canada has stated that CUSMA-compliant goods are also exempt from this particular measure.
Canadian exporters should not assume that every shipment is subject to the tariff. Treatment may depend on product classification, origin documentation, exemptions and other requirements.
Additional 50% tariffs beginning August 19
The United States has also announced additional 50% tariffs on specified Canadian products, effective August 19, 2026.
The affected products range across multiple categories and include goods such as wine, hockey sticks and cement. Unlike the broader Section 301 measure, these tariffs apply to covered goods even when they qualify under CUSMA. Energy, potash, products already subject to Section 232 tariffs and certain other goods are excluded.
These measures have been announced and could still be changed, reduced or withdrawn before or after the effective date.
Canadian counter-tariffs remain in effect
Canada removed many of the broader counter-tariffs introduced in early 2025, but tariffs on specified steel, aluminum and automotive imports from the United States remain in place.
Canada currently applies 25% tariffs to covered U.S. steel and aluminum products, as well as certain U.S. vehicles and vehicle content.
Canada also applies a 25% surtax to targeted steel derivative goods imported from any country. This may be relevant to businesses purchasing products containing steel, even when the finished item is not normally thought of as a steel product.
Because the rules vary by product and industry, check your potential tariff exposure using Agile’s interactive calculator.
How significant is the tariff impact on Canadian small businesses?
Tariffs are already affecting businesses that do not import or export directly.
Statistics Canada reported that nearly one-third of businesses with 1 to 19 employees experienced a negative impact from U.S. tariffs on Canadian goods. A similar share reported negative effects from Canadian tariffs on goods purchased from the United States.
Businesses are also beginning to pass some of these costs to customers. In the second quarter of 2026, 28.3% of Canadian businesses reported passing tariff-related cost increases on through their pricing. Another 33.8% said they were somewhat or very likely to do so over the next 12 months.
This does not mean every business needs to raise prices. It does mean owners should understand whether tariffs are already affecting their costs and margins.
How could tariffs affect your business?
Tariffs may reach your business directly or indirectly.
Higher inventory and material costs
Importers may pay tariffs directly when goods enter Canada or the United States.
Other businesses may see higher prices from Canadian suppliers, distributors and manufacturers that import:
- Inventory for resale
- Raw materials
- Steel and aluminum
- Vehicles and automotive parts
- Equipment and machinery
- Electronics
- Packaging
- Food ingredients
- Furniture and fixtures
- Construction materials
Ask suppliers whether recent or upcoming price increases are related to tariffs, exchange rates, freight or other market conditions.
You can also select your industry in Agile’s Tariff Impact Calculator to see which cost categories may deserve closer attention.
Higher landed costs
The purchase price on a supplier invoice does not always represent the true cost of a product.
A product’s landed cost may include:
- Supplier price
- Freight
- Insurance
- Customs duties
- Tariff surtaxes
- Brokerage fees
- Handling costs
- Foreign exchange costs
When one of these costs changes, the profitability of the product can change with it.
Businesses that only compare selling prices with supplier invoices may overestimate their gross margin.
Use the tariff calculator to explore how tariff-related cost changes could affect your margins and financial planning.
Pressure on profit margins
A tariff-related increase in cost does not automatically lead to a matching increase in selling price.
Businesses may need to decide whether to:
- Absorb the higher cost
- Raise prices
- Reduce discounts
- Change suppliers
- Adjust product offerings
- Negotiate different purchasing terms
- Accept a lower margin temporarily
The right decision depends on customer demand, competitor pricing and the margin available on each product, service or project.
Cash-flow pressure
Tariffs may affect cash flow before they show up clearly in profitability.
Businesses may have to pay higher supplier costs, duties, freight and brokerage fees before receiving payment from customers. Larger inventory purchases can also tie up cash for longer periods.
This can create a gap between when the business pays for goods and when it earns revenue from them.
Changes in customer demand
Canadian exporters may become more expensive for U.S. customers when tariffs are applied at the border.
Even businesses that sell only within Canada could be affected if their customers operate in tariff-sensitive industries such as:
- Manufacturing
- Construction
- Forestry
- Agriculture
- Automotive
- Food and beverage
- Wholesale and distribution
- Retail
- Transportation
Customers may delay projects, reduce orders or become more cautious about spending.
Supply-chain changes
Suppliers may respond to tariffs by:
- Changing where products are sourced
- Increasing minimum order quantities
- Extending delivery timelines
- Limiting product availability
- Introducing temporary surcharges
- Renegotiating contracts
Alternative suppliers may reduce tariff exposure, but switching vendors can create new costs, quality concerns and operational risks.
Which industries may face the greatest tariff exposure?
Tariff exposure depends more on what a business buys and sells than on its industry name. However, certain industries are more likely to experience direct or indirect effects.
For a more personalized overview, choose your industry in Agile’s Canadian Tariff Impact Calculator.
Construction and trades
Construction businesses may experience higher costs for steel, aluminum, vehicles, tools, machinery, fixtures and other building materials.
Important metrics to monitor include:
- Job gross margin
- Material cost variance
- Quote-to-completion cost changes
- Supplier concentration
- Work in progress
- Change-order profitability
Older quotes may no longer reflect the cost of completing the work.
Retail and e-commerce
Retailers may experience changing landed costs for inventory, electronics, furniture, sporting goods, packaging and consumer products.
Important metrics include:
- Gross margin by product
- Inventory turnover
- Landed cost per unit
- Supplier concentration
- Discounting
- Cash conversion cycle Manufacturing and wholesale
Manufacturers and wholesalers may be affected by tariffs on raw materials, components, steel, aluminum, machinery and finished products.
They may also face weaker demand from U.S. customers or higher competition in the Canadian market as goods are redirected from other countries.
Important metrics include:
- Material cost per unit
- Contribution margin
- Production variance
- Customer concentration
- Inventory days
- Accounts receivable turnover Food and beverage
Food and beverage businesses may experience changes in ingredient, packaging, equipment and transportation costs.
Craft beverage companies may be particularly exposed to changes involving aluminum cans, glass, machinery, packaging and exports to the United States.
Important metrics include:
- Cost per unit
- Food or ingredient cost percentage
- Packaging cost per unit
- Gross margin by product
- Distributor margin
- Inventory waste Professional services
Professional service businesses may have limited direct exposure to goods tariffs, but they can still be affected.
Possible impacts include:
- Higher computer and equipment costs
- Reduced client spending
- Delayed projects
- Pressure on clients in tariff-sensitive sectors
- Changes in foreign exchange costs
- Slower accounts receivable
Understanding the industries your customers operate in can be just as important as reviewing your own purchases.
How can Canadian businesses prepare for tariffs?
Businesses do not need to predict every trade-policy decision. They do need clear information about their current exposure.
Start by using Agile’s tariff calculator to review the potential impact on your industry, then use the following steps to examine your specific business.
1. Map your tariff exposure
Identify:
- Products imported into Canada
- Products exported to the United States
- Suppliers that rely on U.S. goods
- Customers in tariff-affected sectors
- Materials subject to steel, aluminum or automotive tariffs
- Revenue concentrated among U.S. customers
Do not rely only on a supplier’s address. The country of origin may be different from the country where the supplier or distributor is located.
2. Confirm classifications and origin
Tariff treatment can depend on the product’s Harmonized System classification, country of origin and eligibility under a trade agreement.
The CBSA maintains Canada’s current Customs Tariff and offers advance rulings relating to classification, value and origin.
Work with a customs broker or qualified trade professional to confirm the treatment of specific goods.
3. Calculate your true landed cost
Review the total cost of getting a product into your warehouse or business location.
Include:
- Product cost
- Tariffs and duties
- Freight
- Brokerage
- Insurance
- Handling
- Foreign exchange
- Other non-recoverable costs
Compare the new landed cost with your current selling price and gross margin.
4. Review pricing and profitability
Review profitability by:
- Product
- Service
- Project
- Customer
- Location
- Sales channel
A business-wide gross-margin percentage may hide individual products or customers that are no longer profitable.
Before changing prices, consider how much of the increase can be absorbed, passed on or reduced through operational changes.
5. Update your cash-flow forecast
Build several possible scenarios.
For example:
- Supplier costs increase by 5%
- Supplier costs increase by 15%
- Sales volume declines by 10%
- Customers take 15 additional days to pay
- The business purchases additional inventory before a tariff begins
- A major customer reduces its order volume
Use the forecast to identify when cash could become tight and what decisions would reduce the pressure.
6. Speak with suppliers and customers
Ask suppliers about:
- Expected price increases
- Tariff surcharges
- Product availability
- Lead times
- Minimum orders
- Alternative products
- Country of origin
Ask important customers about:
- Expected order changes
- Project delays
- Budget concerns
- Pricing sensitivity
- Changes in their own customers or supply chains
Early conversations can reduce surprises on both sides.
7. Track tariff-related costs separately
Your bookkeeping should make it easy to see what is changing.
Consider tracking separate categories for:
- Customs duties
- Tariff surtaxes
- Customs brokerage
- Freight and shipping
- Inventory purchases
- Supplier price increases
- Foreign exchange gains and losses
- Refunds or tariff relief
Separating these costs helps show whether rising expenses are caused by tariffs, shipping, currency changes or general supplier increases.
8. Review available tariff relief and support
Canadian businesses may qualify for tariff remission, duty relief or refunds in certain circumstances.
Programs may be available for goods eventually exported, specified manufacturing inputs, certain vehicle imports and products covered by existing remission orders. Eligibility depends on the goods and how they are used.
The federal government has also expanded the Regional Tariff Response Initiative and introduced additional financing support for businesses affected by steel, aluminum and copper tariffs.
Review the official requirements before assuming your business is eligible.
How should tariff costs be tracked in your bookkeeping?
Consistent bookkeeping is essential when costs are changing quickly.
At minimum, a business should be able to identify:
- Tariffs and duties paid
- Customs and brokerage costs
- Freight costs
- Inventory purchases
- Recoverable sales taxes
- Supplier cost changes
- Gross margin by product or project
- Revenue by customer location
Avoid combining every import-related charge into one general expense account.
Detailed tracking allows you to answer questions such as:
- How much have tariff-related costs increased?
- Which products have lost margin?
- Are supplier increases being passed to customers?
- How much cash is tied up in inventory?
- Which suppliers or customers create the greatest exposure?
- Are pricing changes protecting profitability?
The sooner these changes appear in your reporting, the sooner the business can respond.
How Agile can help
Agile does not determine tariff classifications or provide customs, legal or trade advice.
We help Canadian businesses understand how changing costs are showing up in their books.
With accurate, current bookkeeping and clear financial reporting, you can:
- Identify increases in supplier and import costs
- Track tariffs, freight and brokerage expenses
- Monitor gross margins
- Compare product and project profitability
- Improve cash-flow forecasting
- Understand inventory costs
- Prepare better information for pricing and purchasing decisions
- Give your CPA, customs broker and other advisors reliable records
Tariffs may be outside your control. Your financial information should not be.
Start by checking the potential tariff impact on your industry. Then, get a bookkeeping quote from Agile to see how clearer financial information can help you respond to changing costs with confidence.
Frequently asked questions about Canadian tariffs
What tariffs currently apply to Canadian goods entering the United States?+
As of July 31, 2026, a 10% Section 301 tariff applies to many non-exempt Canadian goods entering the United States. Additional 50% tariffs on specified Canadian products are scheduled to take effect on August 19, 2026. Other sector-specific U.S. tariffs may also apply.
Are CUSMA-compliant goods exempt from U.S. tariffs?+
It depends on the tariff measure. Global Affairs Canada has stated that CUSMA-compliant goods are exempt from the new 10% Section 301 tariff. However, the additional 50% tariffs announced for specified Canadian goods apply even when the goods qualify under CUSMA.
Businesses should confirm the treatment of specific goods with a customs professional.
Can tariffs affect a business that does not import or export?+
Yes. A business may be affected indirectly when suppliers increase prices, customers reduce spending or transportation and equipment costs rise.
Use the Canadian Tariff Impact Calculator to explore how indirect tariff effects may apply to your industry.
What is landed cost?+
Landed cost is the total cost of purchasing and bringing a product into the business. It may include the supplier price, freight, duties, tariffs, brokerage, insurance and handling.
Do tariffs apply to services?+
Tariffs generally apply to goods crossing a border rather than services. However, service businesses can still be affected through higher equipment costs, changing customer demand and clients operating in tariff-sensitive industries.
How can I find out whether a tariff applies to my product?+
Start by confirming the product’s tariff classification, country of origin and trade-agreement status. Consult the CBSA, U.S. Customs and Border Protection, a customs broker or another qualified trade professional.
Agile’s Tariff Impact Calculator can help you understand potential industry-level financial effects, but it does not determine the customs treatment of a specific product.
Important notice
This article provides general information and does not constitute customs, legal, tax, trade or financial advice. Tariff treatment can depend on product classification, country of origin, trade agreements, exemptions and other factors. Confirm the treatment of specific goods with the appropriate government authority or a qualified customs professional.