This is a developing story. The details in this article are current as of publication, but may change as new information becomes available. We will update this page as new details are announced.
With no indication of a policy reversal from U.S. President Donald Trump, blanket tariffs on Canadian goods have officially gone into effect — along with Canada’s first wave of retaliatory tariffs on U.S. imports.
As of midnight Tuesday, the U.S. has imposed 25% levies on nearly all Canadian exports, escalating tensions between the two historically close trade partners. In response, Prime Minister Justin Trudeau confirmed that Canada’s first round of counter-tariffs — targeting $30 billion worth of U.S. goods — has also taken effect, with further measures on an additional $125 billion in imports set to follow in 21 days.
The announcement marks a significant shift in North American trade relations, with potential consequences including job losses, rising inflation, and economic instability on both sides of the border. While Canadian businesses await further developments, staying informed, agile, and prepared for ongoing trade disruptions will be essential.
What are tariffs?
Tariffs are taxes imposed by a government on imported goods and services to make foreign products less competitive compared to domestic alternatives. While intended to protect local industries, they tend to lead to higher costs for consumers and disrupt supply chains.
On February 1, U.S. President Donald Trump announced a 25% tariff on nearly all Canadian imports, with a 10% surcharge specifically on oil. Trudeau said on March 3 that retaliatory tariffs will remain in place until the U.S. trade action is withdrawn, adding that Canada is exploring non-tariff measures in coordination with provinces and territories should the dispute continue.
U.S. moves to scrap de minimus exemption
A long-standing U.S. free trade rule that exempts duties and tariffs on goods valued under US$800 may soon be cancelled for shipments from China and Canada. The de minimis exemption, which allows low-value goods to enter the U.S. duty-free with minimal paperwork, was temporarily revoked for China by President Trump earlier this month before being reversed pending new revenue collection systems. As part of the February 1 executive order, the exemption for Canada will also be eliminated.
Originally part of the 1930 Tariff Act and later amended by Congress, the exemption was designed to reduce transaction costs for businesses and consumers. After being raised from US$200 to US$800 in 2015, it spurred a boom in de minimis imports, with over 1.4 billion packages entering the U.S. in 2023. This rule has benefited sellers from global giants like Temu and Shein to smaller Canadian retailers. Around 80% of U.S. e-commerce shipments use de minimis. However, its popularity has raised concerns among some U.S. lawmakers who argue it enables the illegal flow of narcotics or goods made with forced labour.
Potential impact on Canadian small businesses
In response to U.S. tariffs and annexation threats, two-thirds of Canadian consumers say they’re buying fewer American products, according to a Leger Marketing survey. With Canada and the U.S. as each other’s top trading partners, the economic impact could be massive.
While Canadian businesses across all industries may feel the impact of these potential tariffs, some sectors and their consumers are likely to be more impacted than others, including:
- Retail and consumer goods – This industry may feel significant impact specifically due to the amount of clothing and food products – including agricultural imports – that are sourced from the U.S.
- Construction and real estate – Canadian construction and real estate businesses may feel the ripple effects from increased prices on home renovation and construction supplies.
- Technology and telecommunications – Small businesses who utilize U.S.-based technology and infrastructure support, like internet, cloud storage, etc. may experience disruption or price changes to these services.
Beyond tariff pressures, economic uncertainty is also weakening the Canadian dollar, impacting prices regardless of whether tariffs directly apply.
Consumers in both the U.S. and Canada, including small businesses seeking to fill their everyday workplace and supply needs, are also likely to experience high prices for everything from everyday goods like food and clothing to more expensive items, like computers and cars.
How can Canadian small businesses adapt to tariffs?
Regardless of the outcome of the 30-day postponement, experts see this as an opportunity to reassess your business’s marketing and operations. By focusing on the fundamentals, you can make strategic adjustments to minimize the impact of economic instability and strengthen long-term resilience.
Digital marketing best practices
Specific to your digital marketing, ask yourself a few key questions:
- Am I making the most of the cost-effective channels that are available to me to get the word out about my business? If your business is facing an economic downturn of any stripe, thinking about cost efficacy is key. Channels like email and organic social media are both cost-effective and highly effective for maintaining customer engagement, building brand loyalty, and driving consistent traffic without relying on paid advertising..
- Am I providing value to my audience? As you format your marketing plan and messaging, focus on providing value to your customers and audience through expert advice and content, exclusive offers, and authentic communication.
- Am I communicating consistently? Consistency is key in your marketing no matter what the current trends or economic conditions are like. For each marketing channel you utilize, you should have a plan to do so at a consistent cadence in order to effectively plan content and build customer loyalty.
- Am I taking the time to see what works? Lastly, it’s important to know if your efforts are working. Setting aside time to check your marketing engagement metrics can help you understand which messages are resonating so you can build on those, and which aren’t so you can refine them.
These simple tips work anytime – helping you grow your audience and stay steady no matter what the market throws your way.
Use innovation to your advantage
In addition to taking a moment to reset your basic best practices when it comes to your marketing, another factor to consider is efficiency. The effects of business tariffs may range from an increased cost of doing business to a significant uptick in local customers, depending on your industry and business. Regardless of the projected impact on your specific business, ensuring you are making the most of your time is critical, so you can get back to focusing on other key business activities. This is where innovative technology tools come into play, bridging the gap and giving you back valuable time.
- Email and social media scheduling tools
Using digital marketing tools that allow you to schedule your social media posts and emails in advance can help you get your campaigns set up whenever you have the time, and launch them when you need them, no matter how busy you are. - Email automation
Setting up email automations like a welcome series for when someone subscribes, or topical follow-up emails based on behaviour triggers, can help you to stay in contact with your audience without manually sending out each and every email. - AI content generation
Especially when things are busy, unpredictable, or otherwise challenging, it can be difficult to come up with the right words to say exactly what you mean. Using digital marketing tools with AI content generation capabilities help you to break through any writer’s block, giving you a starting point you can finesse and make your own, customized for your audience. - Digital marketing mobile apps
Using a mobile app to manage your marketing may seem like a no-brainer given how much time we spend on our phones, but your specific business might have you on the go, all the time. (Not all business is done behind a desk!) Being able to keep your marketing running while you’re running is critical, so use the mobile tools at your disposal to help maximize efficiency.
Resources for Canadian SMBs
Ultimately, it’s important for Canadian small businesses to leverage every resource at their disposal – something entrepreneurs excel at.
- Our partner Startup Canada has created a comprehensive Tariff Toolkit Guide to help entrepreneurs and support organisations effectively navigate the complexities of tariffs. It covers regulations, supply chain impacts, pricing, risk mitigation, and strategies for international expansion.
- Constant Contact’s library of on-demand webinars can help you plan and refine your marketing strategy. The library of free webinars offers valuable insights on everything from email design and deliverability to social media strategies and more.
- The Constant Contact Community also offers a number of resources and opportunities to connect with other small businesses, offering valuable insights on digital marketing and everything SMB-related.
As always, Constant Contact is committed to supporting small businesses and nonprofits across the globe. By providing our customers with powerful marketing tools, strategic advice and education, and expert support, we help our customers reach new customers, communicate their value, and drive more results.
