A seismic shift is underway in Canada’s business landscape as President Trump’s tariffs drive companies south of the border.
On Saturday, President Donald Trump enacted substantial tariffs on imports from Canada, Mexico, and China. These measures are designed to address pressing national concerns, including illegal immigration, drug trafficking, and trade imbalances.
The administration has imposed a 25% tariff on all goods from Canada and Mexico, with a 10% tariff specifically on Canadian energy exports. Imports from China are now subject to a 10% tariff.
According to a new KPMG survey, nearly half of Canadian businesses (48%) are actively planning to move production or investments to the United States to stay competitive, while 60% are exploring acquisitions in the U.S. market.
Recognizing the writing on the wall, an overwhelming 65% of Canadian businesses took proactive measures before President Trump even stepped into office.
Many began shipping goods to the U.S. ahead of potential tariffs, ensuring their products avoided any sudden cost increases.
“The new U.S. administration’s economic and trade policies are having huge ripple effects in Canada and around the world,” says Lucy Iacovelli, Canadian Managing Partner, Tax and Legal, KPMG in Canada. “There are important steps that Canadian businesses can take to prepare for trade disruption and higher costs and build resiliency.
“No matter when or if U.S. tariffs or tax cuts take effect, now is the time to be proactive and understand your exposure and develop mitigation strategies,” she said.
Simply put, the Trudeau government’s economic policies have left Canadian businesses scrambling. Faced with high taxes, regulatory burdens, and now U.S. tariffs, companies are choosing to move where the business climate is friendlier—America.
The survey also found that 86% of Canadian business leaders see Trump’s tariffs as a “wake-up call” to boost productivity.
One area where Canadians appear to align with Trump’s priorities? National security.
An overwhelming 89% of business leaders support strengthening Canadian border security to address Washington’s concerns, while 85% back increased military spending—particularly in Arctic defense and NORAD defense to address the U.S. government’s (and NATO’s) concerns.
BREAKING: Almost half of Canadian businesses are now planning to shift investments or production to the United States in response to President Trump’s tariffs.
Additionally, 60% said they will now look to make business acquisitions in the U.S. and are bracing for a recession in… pic.twitter.com/QbqqWwmGMh
— George (@BehizyTweets) February 2, 2025
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