A new round of American tariffs is here. What should you do now?

The latest rounds of American tariffs and Canadian counter-tariffs have brought trade uncertainty back to the forefront of worries for business owners.

For businesses that are directly impacted by tariffs, the first reaction is often panic. Sales and margins suddenly shrink, longstanding customer relationships become uncertain, and years of strategic planning disappear overnight.

Even companies that are not directly subject to tariffs can be impacted through their customers or suppliers.

The truth is that tariffs don't automatically mean disaster. We have been working with entrepreneurs to help them adapt quickly and make informed decisions that can often reduce the impact, and sometimes even uncover new opportunities.

You don’t have to deal with tariffs or the threat of tariffs by yourself. Read below to find advice and tools that can help you get started.

Start with an assessment

When tariffs are announced, many business owners immediately start looking for solutions. But before making any major decisions, it's important to understand exactly how the situation affects your business.

Talk to your customers. Talk to your suppliers. Talk to your distributors.

• Are they seeing lower demand?
• Are they expecting to increase prices?
• Are they changing purchasing plans?
• Are they considering new suppliers?

You can also connect with a customs broker to confirm your exposure and impact at the border, as well as the impact of any of your suppliers shipping across the southern bord.

The first order of business is to create a clear picture of where the risks are emerging throughout your value chain.

Build different scenarios

The next step is scenario planning.

Many businesses make the mistake of relying on a single forecast. Instead, build several scenarios.

• What happens if sales decline by 10%? 
• What happens if tariffs remain in place for six months?
• What happens if tariffs disappear in a month?
• What happens if your largest customer reduces orders by 25%?

Scenario planning allows companies to estimate the impact on:

• Revenue
• Margins
• Cash flow
• Working capital needs
• Sourcing and procurement
• Manufacturing

Keep an eye on your cash flow

If you or your customers are directly impacted, you’ll want to make sure you have enough working capital.

You can use a simple cash flow calculator to list all the money coming into your business and compare it with the money going out.

If you foresee a cash shortfall, you may be eligible for financing support from BDC or one of the other programs that the federal and provincial governments have put in place to ensure you have enough cash on hand to see you through this period.

Review your options

With different scenarios in hand, it becomes easier to determine the best course of action.

Every business will require a different solution, but most options fall into three categories:

Review pricing

Many businesses are asking whether they can pass some or all the tariff cost on to customers.

The answer depends on competitive dynamics, customer relationships and market conditions. It also depends on the level of tariffs that have been levied for your product.

In some sectors, price increases may be accepted.

Others may need to absorb at least part of the additional costs to remain competitive.

Find new customers

If sales to the U.S. are decreasing, finding customers elsewhere may help offset the impact.

For some companies, the fastest opportunity may actually be closer to home.

Many Canadian manufacturers have spent decades focusing on American customers because the market was large, nearby and easy to access. As a result, some businesses have never seriously explored opportunities across Canada.

Now may be the time.

New opportunities may exist:

• in neighbouring provinces
• within new industry segments
• through partnerships with larger Canadian firms
• through public-sector procurement opportunities

The renewed focus on major projects and the defence sector, for example, can often provide the benefits of growth and diversification, at a lower cost and with less risk than international diversification. 

The objective isn't to replace all U.S. sales overnight.  

Instead, it's about reducing dependence on a single market and creating additional sources of revenue.

Review your cost structure

If tariffs are putting too much pressure on your cash, you may need to reexamine how your business runs.

This exercise is often uncomfortable, but it can reveal opportunities that make you stronger in the long run.

Questions to consider include:

• Can we afford our current fixed costs?
• Can we modify products or manufacturing processes to reduce production costs?
• Should we deprioritize or phase out certain products?
• Can we support current staffing levels?
• Can we reduce rent or facility costs?

The objective is not simply cost cutting.

It's about creating a leaner, more resilient organization that can remain sustainable despite increased uncertainty.

If you haven’t been hit, don’t wait

Even if your company has not been impacted by the latest tariff announcements, that doesn't mean you're protected.

This latest annoucement shows that trade policy remains unpredictable, especially for companies that have a large exposure to the American market. Preparing now can ensure you have a plan in place if market conditions deteriorate further.

Focus on diversification to lower risks

For many Canadian companies, tariff pressures highlight a long-standing issue: overreliance on a single market.

When a company’s sales or supply chain are heavily concentrated in one market, any disruption can become a major threat. Diversification reduces that risk.

How do you choose the right market?

Diversification should not be driven by instincts or headlines. Successful diversification is data-driven.

The process usually begins with an internal assessment.

When we work with clients at BDC, our projects all begin with an assessment of a company’s real capacities:

• What is your financial capacity to invest in new markets?
• How do you currently sell and reach customers?
• What is your competitive advantage?
• What could limit your growth? 
• Do you have enough people to support expansion?
• Can your operations handle increased demand?

The reality is that not every company is ready to expand internationally.

Some businesses lack dedicated sales teams. Others do not have the management capacity or the financial strength required to support a new market.

Let research determine the right market

Market selection should be based on objective criteria such as:

• Market size 
• Growth potential 
• Competitive intensity 
• Regulatory requirements 
• Logistics feasibility 
• Customer demand 
• Compliance considerations 
• Supply chain implications

We often see clients convinced they should expand into a specific country, only to discover through research that other markets offer stronger opportunities or fewer barriers. The value of research is not simply finding opportunities. It is avoiding costly mistakes.

Consider industry diversification

Diversification is not only about geography. It can also involve entering new sectors.

For example, manufacturers historically focused on automotive customers may find opportunities in agriculture, defence or other industries. Industry diversification allows companies to leverage existing production capabilities while reducing dependence on a single sector.

That said, entering a new industry requires preparation.

Businesses often need new certifications, new sales capabilities, new industry knowledge and new relationships. Success involves understanding where you fit within a new value chain and assessing whether you have the resources necessary to compete effectively.

The key is to identify sectors where existing strengths can be adapted rather than starting from scratch.

You don’t have to do it alone

Working with entrepreneurs day in and day out, we know that the challenge generally isn’t to find ideas for expansion or new opportunities, it’s knowing where to begin.

The number of programs, support organizations, trade agencies and market resources available can be overwhelming.

Navigating the ecosystem can be difficult without guidance.

Our Trade Resilience Program can help you assess your exposure to potential tariffs, evaluate strategic options, improve operations and finances, and identify diversification opportunities.

From crisis to resilience

Tariffs create pressure. But they can also serve as a catalyst for change.

The choice is not between resilience and growth. The strongest businesses pursue both.

In a world where trade conditions can change quickly, the companies that succeed will be those that prepare early, think strategically and remain open to new opportunities.