A KPMG Canada survey published before the 2024 United States presidential election found widespread concern among Canadian small and medium-sized businesses about American protectionism. Eighty-seven per cent of 735 surveyed leaders feared Canada could become economic collateral damage from tariffs or less favourable trade arrangements.
Businesses were preparing for either result
Eighty-five per cent of respondents said they were reviewing strategy in anticipation of a change in American leadership. Both major U.S. candidates supported some protectionist measures, although Donald Trump proposed a much broader use of tariffs.
The survey measured executives’ expectations, not the probability or size of a future tariff. Business sentiment is useful for understanding planned behaviour, but it is not an economic forecast by itself.
Why Canada was exposed
Canada and the United States share deeply integrated supply chains. Automotive parts, machinery, agricultural goods and energy cross the border at multiple stages, so a tariff can affect producers and consumers in both countries.
Manufacturing, transportation, warehousing, energy, natural resources, technology, media and telecommunications were among the sectors identified as particularly exposed. Larger firms in the survey reported more concern because their cross-border operations can be more complex.
The 2026 trade review
The incoming president would hold office during the scheduled joint review of the Canada–United States–Mexico Agreement in 2026. The review was built into the agreement and did not automatically terminate duty-free trade.
Uncertainty still matters because companies make investment decisions years in advance. A prolonged dispute can delay a factory, redirect purchasing or encourage a business to locate production inside the United States.
How firms could prepare
KPMG tax lawyer Shaira Nanji said businesses could examine trade-relief provisions and ways to mitigate added costs. Practical work includes confirming tariff classifications, documenting origin, mapping suppliers and testing alternative logistics.
Diversifying customers or suppliers can improve resilience, but shifting a mature supply chain is expensive and slow. Firms should not abandon an efficient partner solely because of a campaign statement.
What governments could do
Canadian governments and industry associations could demonstrate how cross-border trade supports American jobs, coordinate outreach by state and prepare lawful countermeasures. They could also reduce internal Canadian trade barriers and expand infrastructure serving non-U.S. markets.
Retaliatory tariffs may create negotiating leverage but also raise costs for domestic users. Any response should identify objectives, exemptions and an exit path.
What happened after the vote
Trump won the election, returning a leader who had imposed tariffs on Canadian steel and aluminum during his first term. Businesses’ concern therefore shifted from a hypothetical campaign risk to planning for a known protectionist administration.
Later events should be evaluated through enacted orders and customs rules, not every political threat. Headlines can move markets before the legal details are known.
The lesson from the survey
Canadian companies could not vote in the U.S. election, but they could prepare for its consequences. The high response percentages showed how closely their plans depended on access to the American market.
Resilience required accurate scenario planning rather than panic: identify exposures, preserve compliance evidence, engage customers and governments and distinguish campaign rhetoric from measures actually in force.
