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.
Tariffs between the United States and Canada have long been a flashpoint in trade policy, but 2025 has brought a new wave of uncertainty for businesses on both sides of the border. With new tariffs introduced by the U.S. earlier this year and recent court rulings shaking their legal foundation, small business owners must remain alert and informed.
Here’s what you need to know about the current state of U.S.-Canada tariffs, how they’re evolving, and how your business can prepare.
A quick recap: What are tariffs and why do they matter?
Tariffs are taxes imposed on imported goods and services. Governments use them to encourage domestic consumption, retaliate in trade disputes, or address economic or national security concerns. For businesses that rely on cross-border trade, tariffs can directly affect pricing, supply chains, and competitiveness.
In early 2025, the U.S. administration introduced new tariffs on Canadian imports as part of broader “economic security” and “anti-narcotics” measures. These included duties on steel, lumber, medical devices, and even some electronics components. The justification: national security and a need to reduce U.S. dependence on foreign manufacturing. In response, Canada introduced counter-tariffs on $155 billion worth of U.S. goods.
May 2025 legal developments mark a turning point
On May 28, 2025, the U.S. Court of International Trade ruled that the Trump administration overstepped its authority in implementing a series of tariffs under the International Emergency Economic Powers Act (IEEPA). The court found that the sweeping tariffs, particularly those related to “Liberation Day” and fentanyl-related sanctions, exceeded the powers granted by Congress.
Key ruling details:
- The court ordered a halt to several key tariffs within 10 days of the decision.
- The ruling could invalidate dozens of other trade measures put in place in early 2025.
- The Trump administration plans to appeal the decision, introducing legal and market uncertainty.
Canada’s response
Canadian Prime Minister Mark Carney welcomed the U.S. court’s decision, reaffirming Canada’s long-held position that many of the 2025 tariffs were “unlawful as well as unjustified.”
Still, Carney cautioned that Canada is not in the clear. Many other tariffs, including those levied under different legal authorities (such as Section 301 or national security provisions), remain active. Ottawa is preparing for further potential measures on:
- Lumber and forestry products
- Pharmaceuticals
- Consumer electronics
- Semiconductors and rare earth minerals
Potential impact on Canadian small and medium-sized businesses
The uncertainty surrounding tariffs is causing ripple effects across industries. Major corporations such as Best Buy, Macy’s, Canada Goose, and Delta Airlines have adjusted or withdrawn their 2025 earnings forecasts. Reasons include:
- Supply chain disruptions
- Cost increases for imported goods
- Shifting consumer demand due to price volatility
Small businesses face similar challenges, often with fewer resources to adapt.
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 a significant impact 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.
Status of the de minimis exemption
The de minimis exemption, a long-standing U.S. trade provision that allows low-value goods (under US$800) to enter the country duty-free with minimal paperwork, is currently under major scrutiny and poised for significant change.
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. 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.
On February 1, 2025, President Trump signed an executive order aimed at revoking the de minimis exemption for imports from Canada and other countries. In March, the U.S. government opted to temporarily maintain the de minimis exemption for Canada until the U.S. Secretary of Commerce certifies that sufficient systems are in place to process and collect tariff revenue effectively. For now, Canadian exporters continue to benefit from duty-free access for small shipments, but the window may be closing.
How can Canadian small businesses adapt to tariffs?
The evolving tariff landscape marks a significant shift in North American trade relations, with potential consequences including job losses, rising inflation, and economic instability. As Canadian businesses await further developments, staying informed and adaptable is key. 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 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 helps 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.
