New Data: U.S. Tariffs Continue to Hammer Canadian Manufacturing, Threatening Jobs and Investment
July 23, 2025
As Prime Minister Carney and President Trump commit to finalizing a new economic and security agreement within 30 days, Canadian Manufacturers & Exporters (CME) is warning that Canada’s industrial base continues to suffer escalating damage.
New survey data from CME reveals that three in four Canadian manufacturers are experiencing moderate to very severe harm from ongoing U.S. tariffs, undermining investment, employment, and broader economic stability.
“The results are clear: tariffs are continuing to inflict serious damage on Canadian manufacturers and their workers—particularly in the steel, aluminum and auto sectors,” said CME President & CEO Dennis Darby. “We urge the federal government to build on recent discussions between the President and the Prime Minister to secure a deal for Canada that removes these unjustified trade barriers.”
Manufacturers taking action to mitigate tariff impacts
To cope with rising costs and market uncertainty caused by U.S. tariffs, manufacturers are actively adjusting their strategies—some of which are already contributing to reduced investment, job losses, and broader economic strain in Canada:
- 49 per cent are pursuing new export markets
- 44 per cent have cancelled or delayed investment plans
- 39 per cent have implemented hiring freezes or layoffs
- 16 per cent have shifted some production to the U.S.
Counter-tariffs and remission process add further strain
Canada’s retaliatory tariffs—many of which are temporarily paused—are also placing additional pressure on manufacturers:
- 66 per cent report increased input costs
- 46 per cent cite disruptions to supply chains and sourcing
- Just 3 per cent believe countermeasures have improved their competitiveness
- 22 per cent say they have had no noticeable impact
Although the federal government has introduced a tariff remission process, awareness and uptake is low. Only 21 per cent of manufacturers are familiar with the process or have applied.
Among those seeking relief:
- 56 per cent want help determining eligibility
- 44 per cent are seeking clear, step-by-step guidance on the application process
- 43 per cent are requesting training and documentation support
CUSMA compliance remains a challenge for some
While nearly 70 per cent of manufacturers report completing all required CUSMA documentation for eligible exports, challenges persists:
- 18 per cent produce CUSMA-compliant goods but have yet to complete the paperwork
- 35 per cent cite a lack of internal expertise as a barrier
- 33 per cent report receiving inconsistent guidance from government or trade advisors
To support compliance, manufacturers are calling for:
- 42 per cent – clearer government guidelines, templates and digital tools
- 29 per cent – more direct access to government trade advisors
- 26 per cent – expanded training and workshop opportunities
Manufacturers call for stronger government action
While recent relief measures are appreciated, manufacturers stress that more decisive action is urgently needed—especially if a deal with the U.S. is not reached in the coming weeks.
Their top policy priorities include:
- 47 per cent – stronger diplomatic efforts to secure tariff exemptions or reductions
- 47 per cent – targeted tax relief to ease short-term cash flow pressures
- 34 per cent – temporary financial assistance to minimize layoffs and stabilize operations
- 30 per cent – a more accessible and efficient tariff remission process
The survey, conducted in May and June, includes responses from more than 100 manufacturing firms across Canada. The findings underscore the vulnerability of Canada’s manufacturing sector, which directly accounts for over 9 per cent of GDP, employs 1.8 million Canadians, and generates 60 per cent of the country’s total goods exports.
With more than 80 per cent of Canada’s manufactured exports destined for the U.S.—representing over 40 per cent of total sector sales—the industry remains highly exposed to unwarranted U.S. trade actions.
More Information
Read the Fact Sheet here
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