Beyond the Tariff Rate: How Canadian Businesses Can Manage New Cross-Border Costs 

For Canadian businesses trading across borders, September brought another significant shift in an already volatile tariff environment. 

Effective September 8, 2026, Canada introduced new counter-tariffs of 15%, 25%, and 50% on targeted U.S.-origin goods, adding another layer of cost and complexity for Canadian importers, manufacturers, and businesses operating integrated North American supply chains. These measures also follow continued U.S. tariff actions on Canadian goods, reinforcing an increasingly complex and evolving trade environment on both sides of the border. 

“It’s going to eat into any profit, and often the profit doesn’t even add up to 50%. Ultimately, it’s going to end with the consumer.” 
– Maureen Gilfoy, Director of Customs Duty, Ryan 

Canadian exporters are also facing significant U.S. tariff pressures. In some cases, companies acting as both exporters of record from Canada and importers of record into the United States may directly absorb those added import costs. Even where the U.S. customer is the importer of record, higher tariffs can still make Canadian products less competitive by increasing landed costs and putting pressure on pricing, customer demand, and margins throughout the supply chain. In our earlier article, Tariffs and Canadian Businesses: How to Manage Costs, Supply Chains, and Investment , we explored how tariffs can affect costs, supply chains, investment, and competitiveness. 

Now that Canada’s latest measures are in effect, businesses should take a closer look at how tariffs apply to their operations and what options may be available to manage the impact. 

Start with Classification and Country of Origin 

A tariff rate of up to 50% naturally attracts attention, but the headline rate does not necessarily tell a business what it will ultimately pay. 

Tariff classification determines whether a product falls within the scope of a particular measure. Our experts recommend validating classifications carefully because an incorrect classification may unnecessarily place a product within the scope of a surtax.  

Businesses should also confirm the true country of origin. A product entering Canada from a U.S. supplier does not automatically qualify as U.S.-origin. Goods may be shipped through the U.S. while originating somewhere else entirely. Only qualifying U.S.-origin goods within the relevant classifications are subject to Canada’s new surtaxes.  

For companies importing large volumes or maintaining extensive product portfolios, reviewing both classification and origin can provide a much clearer picture of actual tariff exposure. 

Look at the Total Duty Cost 

Businesses should also avoid focusing on one tariff in isolation. 

Multiple layers of duty may apply at the same time, including ordinary customs duties, anti-dumping or countervailing duties, sector-specific tariffs, and newer retaliatory tariffs. 

Our experts recommend taking a broader view and assessing the company’s overall effective duty rate, including opportunities related to: 

• Tariff classification 
• Country of origin  
• Customs valuation  
• Duty drawback and recovery 
• Applicable exclusions or relief measures 
• Supply-chain structures  
• Trade agreement qualification 

The objective is to understand the full customs duty cost and identify where legitimate opportunities may exist to reduce it. 

Review Valuation and Supply-Chain Structures 

Customs valuation can also materially affect duty costs. 

For businesses with related-party transactions, intermediaries, or multi-tier sales structures, it may be worthwhile to review how goods are sold, which parties are involved, and whether certain costs can appropriately be excluded from the declared customs value.  

For some businesses, however, supply and procurement strategies alone may not be enough. 

Integrated North American supply chains can amplify the impact of new tariffs, especially when goods cross the border several times during production. Ryan’s experts have highlighted the automotive and pharmaceutical sectors as examples where repeated cross-border movement can create significant exposure.  

Consider an aluminum producer in Canada supplying material to a U.S. can manufacturer, which then sells finished cans back to Canadian food manufacturers. As those cans cross the border multiple times before reaching consumers, tariffs can compound throughout the supply chain, increasing costs well beyond the initial import transaction. 

Businesses may therefore need to reassess sourcing, production locations, suppliers, and how goods move through the supply chain. 

Do Not Overlook the Canada-United States-Mexico Agreement 

Despite the current trade tensions, the Canada-United States-Mexico Agreement (CUSMA) remains relevant. 

CUSMA can continue to reduce ordinary customs duties and, in some cases, provide exemptions from certain U.S. punitive tariffs for qualifying goods.  

Qualification can require a detailed review of a product’s bill of materials and applicable rules of origin. For manufacturers, in particular, confirming that goods are properly qualified under CUSMA may help reduce overall duty exposure.  

With future negotiations also creating uncertainty around the agreement, businesses should continue monitoring both current requirements and possible changes. 

Prepare for Continued Change 

Our customs duty experts have consistently identified the pace of tariff changes as a major concern for businesses. Sudden increases can disrupt purchase orders, pricing assumptions, customer agreements, and capital planning.  

This makes tariff management an ongoing process rather than a one-time compliance review. 

Businesses with significant cross-border activity should regularly review classifications, origin determinations, customs values, sourcing structures, trade data, and changes to applicable tariff measures. 

That visibility can help organizations understand where exposure is concentrated and respond more quickly when policies change. 

Consider Investment and Government Support as Part of the Response 

For some companies, the longer-term response may require operational investment. 

That could include automation, changes to Canadian manufacturing capacity, new equipment, supply-chain changes, or diversification into new markets. 

Government funding and tax incentives may help support eligible projects, but they should follow the business strategy rather than drive it. 

The starting point remains understanding where tariff pressure is occurring or future exposure may exist, identifying possible customs mitigation opportunities, and determining whether broader operational changes make sense. Funding and tax incentives can then be assessed as tools to support those plans. 

From Tariff Reaction to Tariff Management 

Canada’s September counter-tariffs reinforce a broader lesson for cross-border businesses: tariff management cannot stop at checking the latest rate. 

Classification, country of origin, customs valuation, trade agreement qualification, sourcing, relief measures, and tariff stacking can all influence the actual cost. 

With tariffs reaching as high as 50% in parts of the Canada-U.S. trade relationship, the financial impact can be substantial. Our experts have noted that costs at that level can exceed the margins many businesses have available to absorb them.  

Ryan’s Customs Duty and Government Funding teams can help Canadian businesses assess tariff exposure, identify potential duty-reduction and recovery opportunities, evaluate supply-chain and investment considerations, and determine whether available government support may align with planned projects. 

As the Canada-U.S. trade environment continues to evolve, businesses that understand their full customs duty position and regularly reassess their options will be better positioned to manage both current pressures and future changes.