With U.S. President Donald Trump threatening to impose 25% tariffs on Canadian goods, businesses across Canada are scrambling to mitigate potential impacts.
For Jessica Miao, co-founder of Apricotton, a Toronto-based teen bra company, the looming tariffs represent a significant threat to her expansion plans in the U.S. market.
“The biggest concern that we have is just that [the tariffs] are going to make it more difficult to sell to American customers,” said Miao. “They might be deterred by the higher prices if we don’t absorb some of the tariff costs.”
Trump has hinted that the tariffs could take effect as soon as Saturday, but has also given officials until April to finalize the details, leaving Canadian businesses in limbo about which industries will be hit.
Despite the lack of clarity, many businesses have already devised contingency plans.
Companies using Kinaxis, an Ottawa-based supply chain software firm, are running high volumes of scenario simulations, similar to the early days of the COVID-19 pandemic.
“The volume of scenarios being run the week of Jan. 20 is at the same level as during the initial pandemic supply chain crisis,” said Mark Morgan, Kinaxis’s president of global commercial operations.
Many companies are exploring alternative suppliers, shipping routes, and price adjustments to offset potential tariff costs. This is especially pronounced in automotive, chemical, oil and gas, food, and consumer goods industries.
Charlene Li, founder of Vaughan-based Eatable, which makes alcohol-infused popcorn, says the tariffs could drive up shipping costs to U.S. customers.
To navigate the challenge, she is considering partnering with U.S. manufacturers to produce and distribute her product domestically. However, she notes that some ingredients—like sugar—are actually cheaper in Canada, making the decision complex.
To absorb costs, Eatable may increase prices, shift logistics costs to buyers, or modify free shipping thresholds.
For Apricotton, the situation is further complicated by potential 60% tariffs on goods from China, where its bras are manufactured.
“We might have to reroute the product through an intermediary country,” Miao explained, as she explores onboarding a U.S. fulfillment site or adjusting shipping logistics.
Despite the uncertainty, she remains committed to expansion:
“The U.S. is 10 times bigger than Canada, so we still want to expand there,” Miao affirmed.
As businesses brace for potential tariff impacts, many are prepared to raise prices, shift supply chains, or explore new partnerships—all while awaiting further clarity from the White House.