Canadian businesses that purchase goods or services from US suppliers are navigating one of the most challenging trade environments in decades. The combination of US tariffs on Canadian exports, Canadian counter-tariffs on US imports, and currency volatility creates a complex web of costs that directly impacts your bottom line.
Understanding how these tariff changes affect your cross-border payments—and what strategies can help protect your business—is essential for any Canadian company working with American suppliers.
The Current Tariff Landscape: What Canadian Importers Need to Know
Since March 2025, the trade relationship between Canada and the United States has undergone significant changes. While the situation continues to evolve through ongoing negotiations, here’s where things currently stand for Canadian businesses importing from the US.
Canada’s Counter-Tariffs on US Goods
In response to US tariffs on Canadian products, Canada implemented its own surtaxes on American imports. As of September 2025, Canada removed counter-tariffs on most CUSMA-compliant US goods, but maintains a 25% surtax on specific categories:
- Steel and aluminum products: 25% surtax remains in effect
- Automobiles and auto parts: 25% surtax continues
- Non-CUSMA compliant goods: May face additional duties
For Canadian businesses importing these products from US suppliers, the surtax is calculated on the “value for duty”—the cost of the goods before taxes. This means a $10,000 shipment of affected US steel products now costs $12,500 at the border, plus GST/HST and any other applicable duties.
Who Pays the Tariffs?
Here’s a critical point many businesses overlook: the importer of record is legally responsible for paying tariffs. When you’re a Canadian business purchasing from a US supplier, that typically means you pay the tariff when goods cross the border.
The Canada Border Services Agency (CBSA) administers these surtaxes, and you’ll receive a detailed adjustment certificate showing the additional costs. This isn’t optional—tariffs must be paid before you can take possession of your goods.
Remission Relief for Certain Businesses
The Government of Canada has established remission processes providing temporary relief for Canadian businesses that rely on US inputs. Key relief measures include:
- Time-limited relief for steel goods used in manufacturing (extended to January 31, 2026)
- Extended relief until June 30, 2026 for aluminum goods used in manufacturing
- Relief for goods used in public health, healthcare, and national security
If your business depends on specific US inputs, you may qualify for exceptional tariff relief through the remission process. Contact the Department of Finance or consult a customs broker to explore your options.
The Double Impact: Tariffs Plus Currency Exchange
For Canadian businesses paying US suppliers, tariffs represent just one piece of the cost puzzle. Currency exchange rates create an equally significant—and often overlooked—impact on your total costs.
How Currency Fluctuations Compound Tariff Costs
Consider this scenario: You’re a Canadian manufacturer purchasing $100,000 USD worth of components from an American supplier each month.
| Factor | Strong CAD (1.34) | Weak CAD (1.44) | Difference |
|---|---|---|---|
| $100,000 USD purchase | $134,000 CAD | $144,000 CAD | $10,000 CAD |
| With 25% tariff (if applicable) | $167,500 CAD | $180,000 CAD | $12,500 CAD |
| Annual impact (12 months) | $2,010,000 CAD | $2,160,000 CAD | $150,000 CAD |
That $150,000 annual difference comes purely from currency fluctuation—before you factor in any changes to your supplier’s pricing or shipping costs. When tariffs apply, the gap widens further because you’re paying the surtax on a larger CAD amount.
Recent Currency Volatility
The Canadian dollar has experienced significant swings tied directly to tariff announcements and negotiations. Early 2025 saw the loonie drop below $0.70 USD as tariff threats escalated, before recovering to the $0.72-0.73 range as some trade tensions eased.
Currency forecasters expect the CAD/USD rate to trade between 1.34 and 1.42 through 2026, but tariff developments could push the rate in either direction. This uncertainty makes planning difficult for businesses with regular US supplier payments.
Strategies to Manage Combined Tariff and Currency Costs
Smart Canadian businesses are adopting multiple strategies to protect themselves from the combined impact of tariffs and currency volatility.
1. Secure Competitive Exchange Rates
Every cent matters when you’re making regular cross-border payments. Banks typically offer less favorable exchange rates due to higher overhead and built-in margins. Specialized currency exchange providers like CanAm Currency Exchange often provide rates much closer to the mid-market rate—potentially saving thousands on each transfer.
For a business making $100,000 USD monthly payments, even a 0.5% improvement in exchange rate represents $500 in monthly savings, or $6,000 annually. When tariffs are already increasing your costs, optimizing your exchange rate becomes even more critical.
2. Consider Forward Contracts for Budget Certainty
Forward contracts allow you to lock in today’s exchange rate for future payments. If you have known obligations to US suppliers over the coming months, securing a forward rate protects you from adverse currency movements.
This strategy is particularly valuable in the current environment where tariff announcements can trigger sudden currency swings. Knowing exactly what your CAD costs will be helps you maintain pricing stability for your own customers.
3. Review Supplier Contracts
Many businesses haven’t updated their supplier agreements since tariffs began. Consider these contract provisions:
- Importer of record: Who’s legally responsible for paying tariffs? You can negotiate for your US supplier to act as the importer of record, which shifts some administrative burden
- Currency of payment: Is there flexibility to pay in CAD instead of USD?
- Price adjustment clauses: Can prices be renegotiated if tariffs significantly change costs?
- CUSMA compliance: Are the products you’re purchasing CUSMA-compliant and therefore potentially exempt from certain tariffs?
4. Explore Alternative Suppliers
The “Buy Canadian” movement has gained significant momentum. Statistics Canada reports that 20.8% of Canadian businesses changed their marketing to promote Canadian products in the past six months, and 16% experienced increased sales of Canadian goods.
While switching suppliers isn’t always possible—especially for specialized inputs—it’s worth evaluating whether Canadian or other international alternatives could reduce your tariff exposure. Canada has 15 free trade agreements covering 51 countries, potentially offering tariff-free access to alternative supply sources.
5. Time Your Payments Strategically
If you have flexibility in when you pay suppliers, monitoring exchange rate movements can yield savings. Rate alerts from your currency exchange provider can notify you when the CAD strengthens to a favorable level, allowing you to make payments at optimal times.
6. Pass Through Costs Carefully
According to Statistics Canada’s business survey, nearly 25% of Canadian businesses have passed tariff-related cost increases to customers. However, this requires careful consideration of competitive positioning and customer relationships. Industries most likely to pass through costs include wholesale trade (49%), retail trade (45%), and manufacturing (44%).
Government Support Programs Available
The federal and provincial governments have implemented various programs to help businesses navigate tariff impacts:
- Work-Sharing Program: Expanded eligibility from March 2025 through March 2026 for businesses experiencing reduced activity due to tariffs
- Tax payment deferrals: Corporate income tax and GST/HST remittance deferrals provided additional liquidity
- Trade Commissioner Service: Helps businesses find alternative suppliers in regions like Indo-Pacific, Latin America, and Europe
- Provincial programs: Many provinces have established contingency funds and assistance programs specifically for tariff-affected businesses
Looking Ahead: What to Expect
Trade negotiations between Canada and the US continue, and the tariff landscape will likely keep evolving. Canadian businesses should prepare for:
- Continued volatility: Both tariff rates and currency values may shift with political developments
- Sector-specific impacts: Steel, aluminum, and automotive sectors face ongoing 25% tariffs regardless of CUSMA status
- Compliance requirements: Ensuring your imports meet CUSMA rules of origin is increasingly important for avoiding additional tariffs
- Diversification opportunities: New trade agreements with countries like Indonesia, India, and UAE may offer alternative sourcing options
Protect Your Business with Smarter Currency Exchange
While you can’t control tariff policy, you can control how much you pay for currency exchange. For Canadian businesses making regular payments to US suppliers, working with a specialized currency exchange provider offers several advantages over traditional banks:
- More competitive exchange rates closer to mid-market pricing
- Forward contract options to lock in rates for future payments
- Rate alerts to capitalize on favorable currency movements
- Personalized service from specialists who understand cross-border business
At CanAm Currency Exchange, we help Canadian businesses navigate the complexities of paying US suppliers in an era of trade uncertainty. Our competitive rates and personalized service ensure you’re not losing money on exchange when you’re already facing higher costs from tariffs.
Contact us today to discuss your business currency needs and discover how much you could save on your US supplier payments. Call +1 (844) 915-5151 or visit our Windsor location at 3234 Dougall Ave.
This article is for informational purposes only and does not constitute financial, legal, or tax advice. Tariff regulations change frequently—consult a customs broker or trade specialist for guidance specific to your situation.
