Navigating trade and tariffs

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Building resilience in the face of trade disruption

The recent trade landscape has been significantly impacted by tariffs between the U.S. and Canada, impacting over 80% of businesses. Tariffs, which are taxes imposed on imported goods, serve various purposes, including protecting local industries and influencing trade balances. They can encourage consumers to buy domestic products by making imports more expensive, but they may also lead to higher prices for consumers and provoke retaliatory measures from other countries, resulting in trade disputes.

KPMG is committed to supporting and empowering the Canadian business community in transforming challenges into avenues for growth. By embracing a proactive approach and strategically optimizing your business strategies, you can pave the way for long-term success and sustainability.

80% of business leaders say they will be impacted by U.S. tariffs

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September 22, 2025

On September 19^th, 2025 Canada-U.S. Trade Minister Dominic LeBlanc officially kicked off public consultations ahead of the joint review of the Canada-U.S.-Mexico Agreement (CUSMA) in 2026. The government posted a public notice seeking comments and feedback from provinces and territories, Canadian industry, unions and workers, Indigenous communities and other stakeholders until November 3^rd, as it gears up to negotiate formally with the U.S. and Mexico by July 1, 2026. The request for public comments and feedback is in addition to sector-specific recommendations already submitted by provincial leaders and premiers. Business groups in Canada, the U.S. and Mexico are calling for a review of the CUSMA trade pact, rather than withdrawing from it. One of the key purposes of the agreement’s six-year review is to assess whether all three countries wish to renew it. While President Trump has expressed praise for the deal, he has also referred to it as “transitional” and questioned its continued relevance.

On September 18^th, following a two-day trade mission to Mexico to bolster economic ties, Prime Minister Carney signed a new economic and security agreement with Mexican President Claudia Sheinbaum, which the two leaders have said will “complement” CUSMA. The new Comprehensive Strategic Partnership agreement deepens ties between Canada and Mexico and includes:

Prioritizing the development of long-term infrastructure, including ports, rail, and energy corridors
Creating a new bilateral security dialogue to disrupt transnational organized crime, drug trafficking, human trafficking, money laundering, and cybercrime
Building more opportunities for trade and investment – from energy and infrastructure to critical minerals and agriculture
Reinforcing climate and conservation co-operation to protect wildlife and freshwater systems

The Federal government announced it would deliver the federal budget on November 4^th, the first budget tabled under Prime Minister Mark Carney.

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Implementing a proactive trade strategy

In the current environment, it is highly important to proactively assess current business strategies, structures and supply chains to mitigate risk and build resiliency.

Utilize trade data to gain a comprehensive understanding of the current landscape, including potential impacts and opportunities. This information can help pinpoint specific products or materials that are most susceptible to tariff increases and assess their effects on revenues, operations, and partnerships. By grasping the potential impact of tariffs on costs, companies can adopt cost-saving measures to sustain profitability.

Prioritize targeted operating outcomes to develop a response strategy model and scenario evaluation:

Diversify supply chains: By improving supply chain visibility, companies can better understand their operations and consider alternative suppliers located in countries with fewer tariffs, which can help reduce the risks of disruption. Additionally, enhancing resiliency through scenario planning and data-driven decision-making will enable proactive planning for future challenges.

Tariff exclusion process: Some tariffs allow for exclusions that fit the eligibility criteria. Companies can request exclusions for specific products, requiring detailed justifications and documentation.

Strategic transfer pricing: Transfer pricing plays a significant role in customs valuation, as it can directly impact the amount of tariffs paid. By establishing a lower transfer price, businesses may be able to reduce their tariff liabilities.

Evaluate contracts and partnerships: Conducting a thorough review of contracts related to customs duties and tariffs to understand obligations between parties can provide opportunities for cost reduction and improved compliance.

Country-of-origin rules: Assess the application of these rules in your operations.

The Canadian government introduced the tariff remission process as support for businesses impacted by tariffs. Collect the necessary information and submit an application for tariff recovery on goods imported from the U.S. for qualifying entities under the Canadian tariff remission process. These entities can recover tariffs if the goods cannot be sourced from Canada.

Access to insightful trade intelligence will be critical for businesses to stay informed and allow them to proactively adjust their strategies and operations. This monitoring will help minimize unexpected costs and disruptions, ensure compliance, and maintain competitive advantage in the global market. KPMG professionals can support with ongoing monitoring and guide you on how changes could impact your company.

A comprehensive approach to your trade strategy

KPMG Tax, Legal and Advisory leaders can help provide comprehensive support on tariffs and key considerations for navigating the path ahead.

Trade and customs
Optimize supply chains, mitigate impact and recover applicable tariffs

Transfer pricing
Assess structures and policies to reduce tariff liabilities

Supply chain
Enhance resiliency to enable business continuity

Risk services
Evaluate and manage enterprise risks and compliance obligations

Legal implications
Evaluate contracts and partnerships to understand obligations

Mergers and acquisitions
Optimize capital and strategic restructuring to endure challenges

People and change
Manage productivity, risk, and change in the short through long term

Have a question for our team of professionals?

As Canada pulls together to address these uncertain times, KPMG teams can help equip you with the insights you need to make informed decisions on what’s best for your business. Contact us today.

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