Many taking action to reduce their dependence due to tariffs
Toronto, March 26, 2025 – The widespread business disruption caused by U.S.-Canada tariffs is leading Canadian small business owners to shift their suppliers and investments to domestic and international markets other than the U.S., according to new survey data by the Canadian Federation of Independent Business (CFIB).
“Businesses need more certainty, it’s simple as that. As one business owner told us, the unpredictability of the current situation is making surviving the pandemic look like a walk in the park,” said Simon Gaudreault, CFIB’s chief economist and vice-president of research. “As we gear up for the April 2 reciprocal tariffs, no one knows where the U.S.-Canada trade war is heading in the long term. For some businesses, making drastic changes is not feasible, but others are taking actions to offset the current impacts.”
A third (32%) of business owners have already shifted to suppliers/markets within Canada, 27% plan to increase their investment in Canada, while a third (33%) intend to reduce efforts in the U.S. over the next six months.
Small businesses are also promoting Canadian-made products, delaying/cancelling expansion plans, and exploring international alternatives. However, only three in 10 businesses are confident that their actions will help offset the impact of the trade war.
CFIB’s new research also found that:
• While 70% of small firms support Canada’s retaliatory tariffs, nearly nine in 10 are struggling with business planning.
• Nearly half of small businesses (47%) do not consider the U.S. a reliable trading partner.
• While most U.S. exporters have CUSMA-compliant goods, 30% are unsure about their compliance. Half of small firms would find government support in handling CUSMA-related paperwork helpful.
• Nearly a third of exporters use the de minimis rule to export goods to the U.S. This U.S. rule allows companies to export up to $800 USD in goods to consumers duty and tariff free, but it could potentially be phased out.
“Small business optimism is at historically low levels. With the federal election now underway, we’re calling on all political parties to include small business policies in their platforms. That includes commitments to eliminating remaining internal trade barriers and reducing the tax burden on small businesses. We need to instill confidence in business owners and strengthen our economy if we want to get through the next few uncertain months,” said Dan Kelly, CFIB president.
For media enquiries or interviews, please contact:
Dariya Baiguzhiyeva, CFIB
647-464-2814
public.affairs@cfib.ca
Methodology
U.S.-Canada Trade War Survey – Launched March 13, 2025 (ongoing). Results as of March 20, based on 2,957 CFIB member responses. For comparison purposes, a probability sample with the same number of respondents would have a margin of error of ±1.8%, 19 times out of 20.
About CFIB
The Canadian Federation of Independent Business (CFIB) is Canada’s largest association of small and medium-sized businesses with 100,000 members across every industry and region. CFIB is dedicated to increasing business owners’ chances of success by driving policy change at all levels of government, providing expert advice and tools, and negotiating exclusive savings. Learn more at cfib.ca.
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