Even before Washington announced plans to impose 50% tariffs on a range of Canadian exports — including food, alcohol, construction materials and consumer goods — and a 10% “forced labour” tariff, business leaders were calling on Ottawa to take a tougher approach to trade negotiations.
Nearly seven in 10 (69%) said they wanted Ottawa “to be tough negotiators and use all points of leverage,” according to KPMG’s National Business Outlook and Trade Survey, conducted before the latest round of tariffs were proposed. Two-thirds (65%) agreed Canada should be “more transactional and dispassionate” on trade, according to the accounting firm.
“Business leaders want Canada to continue to defend its position at the [Canada-U.S.-Mexico Agreement] negotiating table and reduce tariff exposure,” said Joy Nott, partner, trade and customs with KPMG Canada, in a media release. “At the same time, there is a recognition of a fundamental reset in the trade relationship and the risks that entails.”
Two-thirds (66%) of business leaders said they’ve adjusted prices as a result of tariffs. Almost half of that group (31% of all respondents) have passed the full cost of tariffs on to customers.
Meanwhile, Ottawa’s efforts to strike new trade deals around the world is resonating among business decision-makers. One-third of KPMG survey respondents said they planned to sell into new markets in the next one to three years. A quarter (26%) said they were already exporting and reviewing opportunities with Canada’s existing trade partners.
Business leaders listed the European Union, U.K. and Mexico as the top three non-U.S. markets in which they’ve boosted exports in the last year. They also topped the list companies expect to target over the next three years.
“Canadian businesses are taking trade diversification seriously,” said Ali Jaffery, partner and chief economist with KPMG Canada, in the release. “This is diversification, not decoupling. Canadian businesses remain committed to the U.S. market while building resilience and reducing risk through broader global trade relationships.”
