What these tariffs will do to Canadian businesses? That’s a loaded question. A lot of the political opinion likens this to just another way of warfare.

THE TRUMP DOCTRINE:

For the last month or so, there’s been a lot of discussion about this US-Canada tariff and

potential trade war that’s brewing. In recent days, we’ve been talking about this as sort of an emerging Trump doctrine. And you think about, you know, U.S. presidents sort of leaving their mark on the world. I have a fear that tariffs is, something that Trump wants to leave as a permanent policy.

All of the material I’ve been reading, all of the opinion pieces that are coming out on the vast majority of them are of the mind that this is not a passing thing. So I say to my clients, you know, as you’re forecasting or re forecasting for the rest of 2025, and particularly as you’re contemplating major decisions, whether that’s expansion or capital deployment or acquisitions,

have this part of the deliberate and intentional contemplation in terms of its impact on the business. 

DAVID & GOLIATH:

The United States today is 25% of the world economy. That’s a big number. And so in any trade war, they’re going to have probably the greatest amount of leverage. But, you know, there’s also the wide awareness among Canadian thought leaders that we have natural resources.  We have oil and gas, we have water, we have minerals and we have hydroelectricity, believe it or not, because we were a big provider of electricity to the northeastern United States. And so we do have some tools, and we do a fair amount of trade with the U.S,. and I hope U.S. business interests see as important to them. And maybe they can influencethe outcome of some of this.

HOW ABOUT THE CANADIAN BANK POLICY 

You know, there are a lot of factors that can alter the outcome of this particular direction that the economic landscape is taking. You know, we see the obvious interest rate policy management by the Bank of Canada. All suggestions are that it means lower interest rates because of the impact on inflation and potentially, stagflation and maybe even recession. If it goes on for too long. There’s the fear that the U.S. can endure this, better than Canada can, simply by virtue of size and by virtue of the momentum in their economy right now.

But then there’s also the impact of other countries, what’s China going to do? What’s Mexico going to do? What’s Panama going to do? What’s Europe going to do? I think the aggregate of all of that is going to shape what happens over the next four years. I think we can be sure that the U.S. is going to try to lead in terms of where this goes. I’m just not sure that they will always have the handle. So we’ll see. We might see alliances change.

BUYERS SELLERS CONSUMERS – WE ARE ALL AFFECTED:

Exporting industries, auto industry, steel industry, timber industry, industries that export sort of non-essential products to the U.S. might certainly feel it. There is a reciprocal impact of U.S. imports that come into Canada and whether or not they’re going to suffer as a result of higher pricing in the Canadian market and or just Canadian nationalism – choosing to buy a Canadian.

I think companies that source raw material and or supplies from the US, have to consider whether or not there’s alternate markets where they can get their products. Have to consider to what extent they can pass on price increases to their customers. It’s not just the sellers who are going to have a problem. I think you’re going to see Canadian manufacturers and producers start contemplating whether or not they need to broaden their supply source. And as a nation, we’re heavily dependent on the United States. And so I think companies and countries quite frankly, are rethinking where they want to leave their dependencies.

THE FINANCIAL LENS: FOCUS ON THE ISSUES:

One of the best things that CFOs and financial leaders can and should do within an organization is have a very clear understanding of the KPIs and the drivers for those businesses. And so the best thing they can do is make sure that they frame the conversation such that the decision makers have a clear lens within which to look at the drivers. And to the extent that these macro economic influences affect those drivers, the financial people have to bring that to the table so that that’s at the front of the conversation.

I’m having a very similar conversation with a client of mine right now where they have a great deal of data affecting a great many people within their organization, and they go at it from a whole lot of different ways. And so when we have to make a collaborative or consolidated decision, it’s very difficult. My main message to the team is we need one truth, one set of information, and we need to organize that information to facilitate the right conversation among the business leaders. And that’s what they can do at a time like this. Finance has the widest lens, and what they need to do is to bring it into focus so that other people can take advantage of the information, because there’s going to be a lot of things that are going to affect the outcome. And if we’re having the wrong conversation, we may end up in the wrong destination.

FINAL THOUGHTS:

In the last week I’ve heard of two apps that have come out that if you scan a barcode and it tells you to what extent that product is Canadian made or Canadian sourced. We’ve seen grocery stores putting indicators on their shelves as to which products are Canadian versus not Canadian. I certainly expect that there will be consumer sentiment towards supporting Canadian businesses. 

I think the government’s going to have to lend a hand if it comes down to it. As a nation, Canadians are going to have to rally around the flag if we want to get through this. I think Canadians need to be Canadian in this moment regardless of the party we support. This is one of those times where you gotta be Canadian.