On September 8, Canada imposed new counter-tariffs on C$27.6 billion of US goods, in response to US tariffs on Canadian products imposed in August. The Canadian measures range from 15% to 50% and cover products including steel and aluminum, dairy, appliances, agricultural equipment, plastics and electronics. Plenty of debate will follow over who wins, who loses, and who ultimately pays, but businesses have a more immediate problem: What rules should they plan around?
Companies can deal with a 15% tariff. They can raise prices, absorb some of the cost, negotiate with suppliers, or find alternatives. What is considerably harder is making a five-year investment decision when nobody knows whether that 15% tariff will be 0%, 25%, or 50% six months from now. That uncertainty has a cost.
Imagine you run a Canadian manufacturer that sells heavily into the States. Do you expand your existing plant? Build one in the US? Find new customers in Europe? Hold more inventory? Change suppliers? If you knew today’s tariff structure would remain in place for five years, you could run the numbers and make a decision. But what if tariff rates change again next month? The rational response may be to wait. Multiply that decision across thousands of businesses and uncertainty itself begins affecting investment, hiring, inventories and supply chains, even before knowing the ultimate economic cost of the tariffs.
Businesses aren’t necessarily waiting to find out. The Port of Los Angeles reported record container volumes over June, July and August as businesses moved merchandise earlier amid changing trade policy and supply-chain uncertainty. That isn’t necessarily economic weakness. It is economic distortion. Companies aren’t just responding to demand anymore. They are responding to the calendar.
The same adaptation is showing up north of the US border. Despite all the tariff headlines, Canada’s economy has been more resilient than some might expect. Statistics Canada reported 0.8% real GDP growth in the second quarter of 2026, while revising first-quarter growth slightly higher. Household spending, business investment, and exports all contributed. But resilience doesn’t mean nothing is changing.
In July, Canadian exports to the US fell 6.6%. But exports to countries outside the US increased 7.4%, reaching a record C$25.6 billion. Non-US markets accounted for roughly one-third of Canada’s merchandise exports that month. One month doesn’t make a trend, and tariffs shouldn’t get all the credit or blame. Statistics Canada noted that crude oil and gold contributed significantly to July’s decline in US-bound exports. But the broader point is worth watching: businesses adapt.
If one market becomes more expensive or unpredictable, they look for another. If one supplier becomes uneconomic, they find another. And if the uncertainty lasts long enough, temporary adjustments can become permanent ones. Canada and the United States have spent decades building one of the world’s most integrated trading relationships, but a factory that moved, a supplier that was replaced, or a customer relationship developed halfway around the world may not come back because a tariff eventually disappears.
That’s why focusing exclusively on today’s tariff rate misses part of the story. The bigger question isn’t whether a particular tariff is 15%, 25%, or 50%. It is whether businesses believe the rules will remain in place long enough to make long-term decisions.
Tariffs have a price. Uncertainty has one too.
