US Tariffs and Canadian Brands: 6 Strategies to Stay Profitable

US tariffs on Canadian products will create challenges for small and big brands alike, but there are ways to protect your business. Let’s break down what’s happening, how tariffs impact product businesses, and the best strategies to reduce their impact.

What Are US Tariffs and How Do They Impact Canadian Brands?

Tariffs: taxes imposed by one country on goods imported from another country. Tariffs are trade barriers that raise prices, reduce available quantities of goods and services.

What’s happening (as of March 4^th, 2025): Tariff for imports from Canada will be 25% for most products, with a 10% rate for “energy or energy resources.” The new tariffs will apply in addition to any other duties, fees, exactions, and charges applicable to the covered imports.

Imports from Canada that qualify for de minimis entry are temporarily exempt from the new tariffs.  The original tariff orders had suspended access to the Section 321 customs de minimis entry process, but this was amended on March 2^nd for the newly imposed tariffs. The Department of Commerce has not commented on when it may authorize the imposition of the de minimis entry suspension.

As a Canadian brand, this means that your US customers may be subject to an additional 25% tax unless they fall under the de minimis amount, which is currently $800 USD per day/per customer. Again, keep in mind that the US could remove this amount at any time.

6 Strategies to Reduce the Impact of US Tariffs

Optimize Your Pricing Strategy

• Review profit margins
• Be transparent with wholesale buyers about cost increases and be prepared to split the difference.
• Consider tiered pricing or bundling to offer more value.

Diversify Your Supply Chain

• Explore Canadian or tariff-free international suppliers.
• Negotiate better pricing with existing suppliers.
• Reduce reliance on materials facing the highest tariffs.

Leverage US-Based Fulfillment Centers

• Warehousing inventory in the US can reduce cross-border shipping costs. Keep in mind that the cost/value prop might not make sense if you aren’t moving enough inventory.
• Look into third-party logistics (3PL) partners to streamline distribution.

Ramp up on Direct-to-Consumer (DTC) Sales

• Selling directly always for more margin management, without raising your prices.
• US based customers might be able to benefit from the de minimis amount, where wholesale orders are more likely to be subject to the tariffs.

Take Advantage of Trade Programs & Exemptions

• Research tariff exemptions for certain product categories.
• Check for Canadian government support programs, which have been promised to come.
• Stay updated on trade agreement changes that could impact changing duties and fees

Expand to Other Markets

• Strengthen your sales channels in Canada. Undoubtedly, most companies have not tapped out the Canadian market.
• Explore opportunities in Europe, Australia, and Asia.
• Partner with international retailers that have lower import fees.

While US tariffs add challenges, Canadian brands can mitigate their impact by adjusting pricing, optimizing operations, and exploring alternative markets.

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