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Food, Health & Consumer Products of Canada

Canada–U.S. Trade Relations

A vital trade partnership at risk

Canada and the United States share one of the most dynamic and integrated trade relationships in the world. With the longest undefended border between any two nations, our economies, supply chains, and industries are deeply intertwined. Every day, billions of dollars in goods and services cross the border, supporting businesses, jobs, and communities on both sides.

But that partnership is under serious strain. On February 1, 2025, U.S. President Donald Trump announced sweeping tariffs: 25% on nearly all Canadian imports and 10% on Canadian energy, citing national security and border-related concerns. Canada quickly responded with $30 billion in retaliatory tariffs, and signaled a second round targeting an additional $125 billion in U.S. goods.

A temporary pause in early February provided brief relief, but on March 4, the initial round of U.S. and Canadian tariffs came into effect. Canada also introduced a remission process for businesses unable to source alternatives.

While a U.S. deferral on CUSMA-compliant goods delayed further escalation, the trade climate worsened on April 2, when President Trump launched global tariffs against 24 countries and the EU. Canada and Mexico were spared, but key Canadian sectors remain affected.

On April 3, Prime Minister Mark Carney condemned the ongoing U.S. measures and announced targeted Canadian tariffs on non-USMCA-compliant U.S. vehicles, in direct response to ongoing pressure on Canada’s auto industry.

Current Status

U.S. tariffs on Canadian steel, aluminum, and auto parts remain active.
Canada’s March 4 retaliatory tariffs on $30B in U.S. imports are still in effect.
The second phase of Canadian countermeasures (covering up to $125B in U.S. goods) is on hold, pending further developments.
Canada has imposed a new tariff on U.S. vehicles that fail to meet USMCA rules of origin, directly targeting the American auto sector.
The federal government’s remission process remains open for companies facing sourcing challenges.
Business support measures have been introduced, with additional programs expected as the situation evolves.

FHCP continues to closely monitor developments and engage with policymakers on both sides of the border. We remain committed to advocating for a long-term solution that protects Canadian manufacturers, businesses, and consumers while ensuring stable trade relations with the U.S.

If you’re an FHCP member, ensure you’ve opted to receive our Member Alerts for the latest trade updates impacting our industry delivered right to your inbox.

Tariffs create economic instability

Tariffs on Canadian goods and energy were framed as a way to protect domestic industries, but in reality, they disrupt economic stability, drive up prices, and create job uncertainty on both sides of the border. The Canada-U.S. trade relationship thrives on deeply integrated supply chains that keep goods affordable and businesses competitive. Trade barriers only weaken economic growth and put affordability at risk.

Rising costs for essential goods

For the food, health, and consumer products sector, these tariffs increase costs on everyday essentials—groceries, personal care items, household products, and over-the-counter medications. At a time when affordability is already a major concern, families and businesses alike are feeling the strain. Small and medium-sized businesses may be forced to cut jobs, reduce operations, or pass higher costs onto consumers.

Retaliatory tariffs add to the pressure

In response to U.S. tariffs, Canada has announced its own countermeasures, which, if implemented, will further raise costs on critical U.S. imports. This escalates inflationary pressures, making everything from raw materials to finished goods more expensive for businesses and consumers alike. Instead of strengthening economies, escalating tariffs only increase financial burdens.

A better path forward

Rather than imposing trade barriers, Canada and the U.S. must work together to reinforce supply chain resilience, attract investment, and protect North American competitiveness. FHCP continues to advocate for a long-term, cooperative solution that eliminates harmful tariffs and ensures fair, open trade that benefits businesses, workers, and consumers.

How Canada-U.S. Trade Powers Both Economies

Every day, over US$2.5 billion in goods and services crosses the Canada-U.S. border.

Canada buys more U.S. goods than China, Japan, and Germany combined, making it the largest export market for the U.S.

Canada is the #1 export market for 36 states and a top-three market for 46 states. 43 states export over US$1 billion to Canada annually.

About 70% of Canadian exports to the U.S. are used in making other goods, supporting North American manufacturing.

In the first nine months of 2024, over C$800 billion (US$600 billion) in goods crossed the border.

When including services, total trade reached C$910 billion (US$683 billion)—the equivalent of C$3.6 billion moving between Canada and the U.S. every single day.

Trade, Tariffs & Truth: What Canadians Need to Know

As tariffs threaten supply chains and affordability, FHCP is actively engaging with policymakers, media, and industry leaders to push back against harmful trade barriers. We’re committed to ensuring that businesses, workers, and consumers understand the real impact of these policies—and why simply buying "Made in Canada" is not a viable solution.

Through media appearances, public statements, and direct advocacy, we’re dispelling trade myths and reinforcing the value of a strong Canada-U.S. partnership. Read our full statement on tariffs to learn more about our position and ongoing efforts, as well as our position on simplistic “Buy Canadian” campaigns that may unintentionally mislead consumers and disrupt Canada’s integrated supply chains.

Media Spotlight: Clearing Up the Confusion

Misinformation is fueling confusion about tariffs and “Buy Canada” campaigns. FHCP CEO Michael Graydon breaks it down:

📢 Why tariffs won’t send grocery prices soaring—but will cause economic disruption.

🔗 Trump’s tariffs will cause chaos — but your grocery bill won’t spike: here’s why (Toronto Star, updated Feb. 27, 2025)

📢 What “Made in Canada” really means—and why shopping local requires a closer look.

🔗 Made in Canada vs. Product of Canada: What these labels mean and how to make sure you’re buying Canadian (Toronto Star, updated Mar 7, 2025)

📢 Viral lists don’t always tell the full story. FHCP EVP Errol Cerit urges consumers to seek facts over hashtags and understand how global companies manufacturing in Canada fuel jobs, investment, and economic resilience.

🔗 Read Errol's insights on LinkedIn (Feb 2, 2025)

Tariffs & Your Grocery Bill: What to Expect

With rising concerns about how tariffs might affect the cost of living, it’s important to understand the facts. While food prices may increase, the impact will be gradual—not an overnight surge. Here’s what consumers need to know:

📢 How tariffs will impact food prices—what to expect at the grocery store.

🔗 Shoppers will see some food prices rise because of tariffs — but not all at once (The Canadian Press, March 5, 2025)

📢 Which grocery prices might rise first—and how soon you’ll see the impact.

🔗 Price increases could hit Canadian consumers in mere days—here’s what’s likely to rise first (Toronto Star, March 6, 2025)

Watch: The Unintended Consequences of #BuyCanadian

Some internationally owned brands manufacture in Canada, creating jobs and investing in local communities. Meanwhile, some “Canadian” brands source from abroad. Michael Graydon unpacks the complexities of the #BuyCanadian movement on CTV National News.

🔗 Watch the full segment on CTV News

Listen: Empowering Canadian Manufacturers – A Critical Need Amid Trade Uncertainty

With trade wars adding new layers of uncertainty, supporting local manufacturers has never been more urgent. FHCP CEO Michael Graydon explains how addressing systemic issues can lower costs, create jobs, and strengthen Canada’s food, health, and consumer product industries.

🎙️ The Morning Rush with Bill Carroll (Ottawa) 580 CFRA – Michael Graydon (March 6, 2025)

🎙️ This Morning with Stacey Brotzel (Edmonton) 880 CHED – Michael Graydon (March 6, 2025)

🎙️ John Moore in the Morning (Toronto) NewsTalk 1010 - Michael Graydon (March 5, 2025)

Trade, Trust & Transparency: What Members Need to Know

As businesses navigate rising costs and shifting trade dynamics, understanding product origin claims is increasingly important. Canadian consumers are showing growing interest in locally made products, and FHCP members are actively seeking clarity on what qualifies as “Made in Canada” versus “Product of Canada.”

➡️ Made in Canada vs. Product of Canada: What You Need to Know — In this exclusive insight from FHCP Associate Member McCarthy Tétrault, get a clear breakdown of these definitions, the key compliance considerations, and what your business needs to know (requires an FHCP member log-in to view).

Additional Resources

🔗 U.S. Tariffs and Canadian Countermeasures – Norton Rose Fulbright provides a legal perspective on the impact of newly imposed tariffs and Canada’s response strategies. Read more here.

🔗 Trade Turbulence Overview – Gowling WLG explores the broader trade landscape, offering insights on shifting policies and business implications. Learn more here.

🎤 KPMG Webinar: Navigating an Uncertain Trade Landscape – Featuring insights from the Honourable Bill Morneau (Former Minister of Finance for Canada), Dan Kelly (President and CEO of CFIB), and Greg Duggan (CEO and Co-Founder of Alcorn Partners), this discussion covers how businesses are adapting to the current trade environment and strategies for resilience. Watch the webinar.

📊 Numerator Webinar: Consumer Reactions to Tariffs – This session covers macroeconomic trends and consumer sentiment, including how Canadians perceive tariffs and their impact on purchasing decisions. Future updates will include new survey data on Buy Canadian sentiment and brand perceptions. Watch the webinar.