Prepare Your Business for Potential US-CAN Trade Policy Changes
- Alexander
- Feb 3
- 3 min read
Updated: Feb 17
I've been receiving questions from many business leaders about the potential impact of new tariffs on Canadian-US trade relations. While policy changes remain uncertain, smart business leaders know that preparation is key to both protecting and growing their companies during periods of change.
Having guided companies through various market shifts, I believe the best approach combines strategic preparation with practical action steps. Here's how you can start preparing your business:
Understanding Your Exposure
The first step is getting clear visibility into your potential exposure. This means looking beyond direct imports and exports to understand your entire supply chain. Key questions to consider:
What percentage of your revenue comes from US sales?
How much of your supply chain relies on US-sourced materials or components?
Do your suppliers source their materials from the US?
How would increased costs affect your pricing and competitive position?
This analysis should include both direct impacts (like increased costs on your imports) and indirect effects (such as suppliers passing on their increased costs to you).
Practical Steps You Can Take Now
While it's important not to overreact to uncertainty, there are several low-risk steps you can take to protect your business:
Review and Update Contracts
Examine your existing contracts with both suppliers and customers. Are there provisions for handling tariff-related cost increases? Now is the time to clarify these terms and potentially update standard contract language for new agreements.
2. Inventory Management
Consider making some strategic inventory management adjustments, like:
Reviewing current inventory levels and reorder points
Assessing whether pulling forward certain purchases makes sense
Evaluating storage options on both sides of the border
3. Supply Chain Resilience
Begin quiet conversations with alternative suppliers, not to change immediately, but to understand your options. Consider domestic suppliers or those from non-affected countries who could step in if needed.
Turning Challenge into Opportunity
Yes, tariffs present challenges, but they can also create opportunities for prepared businesses:
Market positioning: Companies that plan ahead can maintain more stable pricing compared to unprepared competitors
Supply chain optimization: Use this as catalyst to improve efficiency and reduce costs in other areas
Innovation: Consider whether vertical integration or new product development could help bypass tariff impacts
Making Strategic Decisions
The key is finding the right balance between preparation and overreaction. Consider these principles:
Focus on data-driven decisions rather than emotional responses
Implement low-risk preparations that benefit your business regardless of policy changes
Keep cash flow implications in mind when considering inventory or supply chain changes
Stay informed about both policy developments and industry responses
When to Seek Help
If you're unsure about your company's exposure or the best preparation strategy, consider bringing in expertise to help assess your situation. A financial partner who understands both the numbers and operations can help you:
Quantify potential impacts on your business
Develop scenario-based action plans
Identify opportunities to strengthen your competitive position
Structure financing solutions if needed for inventory or supply chain changes
The goal isn't to completely insulate your business from every possible change, but rather to understand your exposure and have clear plans ready to execute if needed. The companies that thrive during market shifts are usually those that prepare thoughtfully while maintaining the flexibility to adapt as situations evolve.
As your financial partners, we're here to help turn these challenges into opportunities for growth. Don't hesitate to reach out if you'd like to discuss your specific situation and develop a strategy that works for your business.
