How Tariffs Hurt U.S. and Canadian Businesses – And What You Can Do About It

Politics is a tricky subject and one we tend to avoid around here. But regardless of your political beliefs, Donald Trump, the new President of the United States, has taken office and plans to shake things up worldwide for businesses. In fact, he’s already gone to work, levying a 25% tariff on all trade from Mexico and Canada, with a lower 10% tariff on energy resources. This announcement has many businesses worried.

This tariff was initially planned to take effect at the beginning of February but was postponed until March 1st, giving time for more negotiations. With the threat of tariffs looming, businesses in North America are scrambling to determine what this means for their operations’ future.

Today, we’ll go over how tariffs work, who pays tariffs, and what they mean for your business. So, if you’re looking to protect your business from the possibility of tariffs in the future, you’ve come to the right place.

What is a tariff?

A tariff is a tax imposed by a government on imported goods and services. Some tariffs are ad valorem (a percentage of the product’s value), while others are specific (a fixed fee per unit). Governments often impose these taxes on particular imports. For example, President Trump recently announced a 25% tariff on all steel and aluminum imports coming into the US. This means any country that sells steel or aluminum to the US will be subject to this 25% tax.

In addition, tariffs can stack. For instance, the steel tariff would be on top of the 25% tariff announced on all goods from Canada and Mexico. This would mean that steel and aluminum imported to the US from either Canada or Mexico would be subject to a 50% tax. 

How do tariffs work?

As mentioned above, tariffs are taxes on products imported from other countries. If your business operates in Canada and sends products to customers in the US, you would be subject to these trade tariffs. The revenue from these tariffs would go directly to the government to …

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