Canada-U.S. Trade War Once Again Squeezes Supply Chains

By ASCM CEO Abe Eshkenazi, CSCP, CPA, CAE

Just when we thought cross-border friction was easing, a breakdown in Canada-U.S. negotiations has triggered sweeping 50% tariffs on Canadian goods, forcing companies to immediately recalculate sourcing, route planning and landed costs. With Ottawa already preparing dollar-for-dollar counter-tariffs, procurement teams must act quickly to insulate their operations from severe cost spikes and supply disruptions. 

President Trump has claimed that Canada “unfairly discriminates against U.S. automobiles, alcohol and dairy products,” per the Associated Press. In response, Prime Minister Carney pledged that, on September 8, his country will mirror the tariffs on American exports. U.S. steel imports had already fallen 30% since Canada imposed the earlier 25% tariff; the new 50% rate is expected to cut them even further, significantly affecting many industries.  

“Canada and the United States have deeply integrated supply chains across the auto, energy, agriculture and manufacturing industries, making a prolonged trade fight potentially costly for businesses and workers on both sides of the border,” the AP continues.  

As I recently told Kate Reilly at NBC: “Canada doesn't write the checks to the U.S. Treasury. When a tariff is placed, the U.S. importer pays. So, the importer must then decide, ‘Do I absorb the cost? Do I negotiate with my suppliers? Do I find a way to pass the cost along to the consumer?’” These are difficult questions — especially for today’s supply chains, which have faced repeated blows from the war in Iran, climate change and previous tariff iterations.  

Here’s just one example — paper products — from The Guardian: “The U.S. accounts for more than 20% of global tissue consumption despite having only 4% of the world’s population … Though American toilet paper and tissues are often made domestically, they heavily rely on lumber-rich Canada for raw materials.” Additionally, Packaging Dive says tariffs on containerboard and boxboard endanger essential product packaging, quoting the American Forest & Paper Association’s warning that counter-tariffs will add uncertainty and disrupt cross-border supply chains vital to manufacturers on both sides. 

“We've had tariffs on top of tariffs,” I stressed in my NBC interview. “One tariff may affect a small number of products, but when you layer those onto materials, components and finished goods — and products that cross the border multiple times — then you see those costs significantly increase throughout the supply chain.”  

Timely talks in an evolving environment 

It’s natural to feel apprehensive about ongoing trade conflicts, but you don't have to navigate them alone. ASCM’s CHAINge conference, September 29-30, will give you the playbook you need to lead through uncertainty. Top industry experts will help you tackle trade disruptions, cost pressures and risk mitigation in sessions including “Tariffs and Supply Chains: A Look Ahead” and “From Resilience to Readiness: Designing Supply Chains for a World that Never Stabilizes.” Lock in $200 in savings by registering before September 1 — see you in Long Beach!