The looming possibility of a 25% U.S. tariff casts a long shadow over Canada’s food, health, and consumer products industries. The potential fallout is staggering: disrupted supply chains, escalating costs, and a ripple effect that could destabilize our agriculture and manufacturing sectors. This is a moment of reckoning for Canada—one that calls for proactive measures to safeguard our economic future.
Canada’s deep reliance on the U.S. market leaves us particularly vulnerable to such tariffs. Our agricultural exports, including $8.6 billion in canola, exemplify the risks. Tariffs would slash profitability for Canadian producers and impede access to a market integral to our economy. Businesses, from small farmers to large retailers, already face growing uncertainty, making long-term planning increasingly difficult.
Non-tariff barriers (NTBs), such as labeling requirements and regulatory changes, compound the challenge. History has shown how NTBs, like the U.S. Country of Origin Labeling laws, can disrupt trade as much as direct tariffs. Should these barriers rise in tandem with tariffs, Canadian industries will find themselves squeezed even further.
The economic impact is vast. Research suggests a 25% tariff could shrink Canada’s GDP by 2 to 3 percent, depending on whether and how Canada retaliates. But GDP is only part of the story. Jobs—a deeply personal dimension of economic impact—are also at stake. An estimated 2.4 million Canadian jobs are tied to U.S. exports, spanning industries from automotive manufacturing in Ontario to potato farming in Prince Edward Island. These jobs, whether directly involved in exporting or part of the supplier network, face disruption, reduced hours, and heightened uncertainty. In Alberta alone, over one-quarter of income comes from exports to the U.S., making it particularly exposed.
Despite the challenges, Canada has an opportunity to strengthen its economic resilience. The Indo-Pacific region presents a promising opportunity for Canada to expand its trade footprint. With rising demand for agricultural and manufactured goods, forging partnerships in this region can help mitigate our reliance on the U.S. Expanding access to these markets is not just strategic—it’s essential for long-term stability.
Unified action is paramount. At FHCP, we are collaborating with stakeholders across industries and levels of government, but we must go further. Retailers play a vital role in this conversation. Together, we must explore solutions to stabilize supply chains, reduce costs, and ensure consumers have continued access to the products they depend on. This collaboration requires frank discussions, creative thinking, and a shared commitment to minimize disruptions for Canadian families and businesses alike.
The stakes for consumers are undeniable. The effects of tariffs will ripple down to the shelves of grocery stores and pharmacies, manifesting as higher prices, reduced variety, and fewer choices. Inflation is already squeezing household budgets, and further disruptions will amplify the challenges for everyday Canadians. This is why it’s critical for industry and government to work hand in hand—not just to safeguard the economy, but to protect the consumers who ultimately bear the brunt of these changes.
We are living in an era defined by disruption, where protectionism, climate challenges, and labor shortages are reshaping global trade. While the threat of U.S. tariffs underscores the urgency of action, it also highlights a larger need for adaptability and resilience in our economy.
By taking decisive steps to diversify trade, foster collaboration—including with retail partners—and invest in domestic strength, Canada can turn this moment of uncertainty into a turning point—one that secures our economic future and safeguards the industries, jobs, and consumers that depend on it.
This article was originally published on LinkedIn.