Written by: George Staikos, Boundless Business Consulting
Eight months into President Trump’s second term, with no new U.S.-Canada trade agreement, Canadian SMEs continue to face uncertainty. As of August 2025, Canadian retaliatory tariffs on many U.S. goods are being repealed; however, U.S. tariffs remain at 35% for non-CUSMA-compliant products (Source: International Trade Update, August 2025).
While a U.S. federal appeals court has deemed wide-ranging Trump-era tariffs illegal, citing constitutional overreach, they have allowed those tariffs to remain pending with a Supreme Court decision expected by mid-October (Source: AP News, August 2025). As expected, the Trump administration is appealing and pursuing alternate legal frameworks (Source: Reuters, August 2025).
For SMEs in southern Ontario and across Canada, this unsettled economic environment is not theoretical. It is real and impacting businesses right now.
Five Tactical Moves for SMEs in the Current Trade Environment
Track Policy Flux: Set Your Business on Alert
With legal rulings shifting by the day and tariffs riding a tenuous line, SMEs must add macro-trade updates to their strategic dashboards. Assign a ‘tariff watch’ lead to track key developments (especially the one marked by the October Supreme Court timeline). Proactive clarity fosters stronger planning.
Audit Your Product Mix and CUSMA Compliance
Since many U.S. tariffs target non-CUSMA goods, use the CUSMA exemptions to your advantage. Confirm which inputs genuinely qualify: adjust packaging, sourcing, or product components if possible. Even partial compliance can reduce tariff exposure significantly.
Hedge Risk with Price Modelling, Not Guesswork
Use sensitivity financial modelling to create ‘what-if’ scenarios: what’s your margin if a 35% tariff extends, or if CUSMA provisions are invalidated? Run break-even and bottom-line impact analyses to inform supplier conversations and pricing strategy. It’s tangible, not hypothetical.
Lean Into Domestic and Nearshore Strength
As Canada maintains tariffs on steel, aluminum, and autos, identifying local or nearshore suppliers can reduce both cost and risk. Consider partnering with Ontario manufacturers or input providers to minimize trade uncertainty where you can’t guarantee CUSMA coverage.
Plan for Fluidity in Your Go-to-Market Strategy
With U.S. trade backlog and policy disputes lingering, build flexibility into your demand generation. Maybe it’s time to invest in non-U.S. markets like the EU or Asia, while keeping the U.S. option open, should stability return. Right now, adaptability is the best roadmap.
Final Thought
This isn’t just temporary turbulence, it’s structural volatility. In the absence of a trade deal, with U.S. tariffs persisting and legal disputes reaching the Supreme Court, one thing is clear: resilience must be carved into your strategy.
Canadian SMEs that adapt by monitoring policy, optimizing supply chains, modelling risks with data, reinforcing local partnerships, and diversifying markets will emerge stronger.
Resilience isn’t a fallback plan. It’s a competitive edge.
Interested in building resilience into your growth engine? Schedule a free 30-minute call with Linda!
