Half of Canadian SMEs no longer consider the U.S. a reliable trade partner

Source: FCEI

Ottawa, March 26, 2025 — Nearly half of Canadian small and medium-sized enterprises (SMEs) (47%) no longer see the United States as a reliable trade partner, according to a new survey by the Canadian Federation of Independent Business (CFIB). The ongoing trade tensions and looming reciprocal tariffs have prompted many business owners to pivot away from the U.S. and invest in domestic and other international markets.

With retaliatory tariffs set to come into effect on April 2, business confidence is being severely tested. Thirty-two percent of SMEs have already shifted to Canadian suppliers, 27% plan to increase their investments within Canada, and 33% expect to reduce their investments in the U.S. over the next six months.

“Uncertainty is the greatest challenge. One business owner told us that surviving the pandemic felt easier than navigating today’s trade environment,” said Simon Gaudreault, CFIB’s Chief Economist and VP of Research.

Key findings from the survey include:

• While 70% of SMEs support Canada’s retaliatory tariffs, 88% say tariffs make business planning more difficult.

• 30% of Canadian exporters are unsure whether their goods meet CUSMA/USMCA compliance standards.

• About a third of exporters rely on the U.S. de minimis threshold (under $800 USD) to avoid tariffs — a policy that may soon be phased out.

As the federal election approaches, CFIB is calling on all political parties to prioritize SMEs in their platforms, with commitments to reduce tax burdens, streamline CUSMA-related processes, and remove interprovincial trade barriers.

“SMEs drive the Canadian economy. Restoring their confidence is critical to weathering the uncertainty ahead,” said Jasmin Guénette, CFIB’s Vice-President of National Affairs.