A Canada-Tariff Strategy Planner

The new 50 percent duties President Trump dropped on Canada garnered enormous press coverage since they took effect August 22. But while they hit roughly $20 billion a year in Canadian goods, it is worth keeping things in perspective: They only cover about 5 percent of what Canada ships us: cement, furniture, plywood, textiles and apparel, seeds, refrigeration equipment, cosmetics, jewelry, hockey sticks, fishing rods, swimming pools, wigs.

The bigger worry is where things go from here. September 8 the other shoe drops, with Prime Minister Mark Carney’s counter-tariffs on C$27.6 billion of American goods, aimed at steel, dairy, appliances, agricultural equipment, pulp and paper and electronics. If that happens, Washington threatens 50 percent duties on cars and car parts from Canada—in January. Ford Motor with its massive Detroit-Windsor integrated manufacturing, would have a particularly tough time choking that down.

In the meanwhile, it’s a good moment to step back and analyze the situation more clearly—and look for opportunity. To help, we reached out, as we usually do, to Adam Echter, partner at Simon-Kucher and a longtime pricing hand for thoughts on how CEOs and their teams should be thinking.

“You’ll find that a lot of people are not as exposed to this stuff as the headlines are going to read,” he says. “They splash these big numbers on the headlines, but then they take all this stuff out. Exceptions, exceptions, exceptions, exceptions.”

Find out which side of the trade you’re on

Echter’s read is that the press has assumed most CEOs are victims here, while many mid-sized businesses are not. “For every loser, there’s a winner,” he says. “And in a lot of these cases, there are mid-market U.S. winners. The losers are the big multinationals. But the small Texas-based manufacturer, the regional player in Michigan, those could be the winners.”

You likely already know if you’re going to take a beating from this wave of tariffs. Look around, see if your rivals are, do some analysis on where large multinationals in your arena could feel pain. Then, if you’re going to be a winner, in Echter’s words, “go ahead and win.”

If you’re a winner, act like one on price

Echter reminds us that imposing 50 percent tariffs on a product isn’t about Washington looking to just raise revenue—it’s about volume, about pushing to get an industry to shift operations south of the border (many Canadian manufacturers, in fact, are having to think this through right now). That takes time—and represents a big opportunity.

If you’re a U.S. producer in any of these categories, the buyers who’ve been sourcing from Canada can’t get it there anymore at anything like the old price. Expect your phone to ring—and be ready for how you’ll answer.

“Recognize your position of power,” he says. “Be aware that they’re calling because they can’t get your products anywhere else. And the people on the phone are going to be very nice when they say, ‘I have so much volume. What a great deal for you. I need it for 75 cents.’ You need to be prepared to say, ‘Thank you. I have this widget and you need this widget. It’s $1.50.’”

Don’t confuse a windfall with a trend

But, he cautions, you need to hedge here given the volatility of the politics. Take the volume, add a third shift, run Saturdays. Do not pour concrete on a new plant. “Don’t go and get a bank loan and triple your capacity,” Echter says. “There’s a high likelihood that this will resolve itself within, call it six years, if you want to put a political cycle in it, but maybe six days, who knows?”

The sequencing matters, and it’s the same one he’s given us before. First, take the volume, drive your utilization. Once your plant is entirely full, “raise your prices, because a highly utilized plant with high prices is going to be printing profit, and that’s okay.”

When this battle does resolve, don’t kid yourself—your new best customer will not stay out of loyalty. “Procurement can be ruthless,” he says. “They do not care about your relationship and they will move it right back to the lowest cost provider. And if the Canadians were the lowest cost provider before the tariffs went up, they will likely be the lowest cost provider after they go down.”

The test for any capital request that crosses your desk this fall: “If I did a capacity expansion, will the ROI manifest before the tariff goes away?”

Also, a reminder: There’s a pricing version of the same discipline, as Echter has counseled us across years of these conversations. When a change is temporary, keep it out of your list price. Put it in a surcharge.

“If you’re trying to constantly update your list prices with all the different tariffs and changes that are happening and moving, it’s going to be incredibly difficult and confuse everybody,” he told us last year. A surcharge tied to a named cost driver moves when the driver moves, and it disappears when the driver does. A list price increase is a negotiation you have to reopen—with every customer, in public—the day the tariff comes off.

If you’re a loser, run the math on the right line

First, the good news. “Dust off the tariff playbook that you created a year ago when tariff 1.0 happened,” Echter says. “So you’re not starting from scratch, hopefully. Don’t forget that you already freaked out a year ago.” You did, and you acted: In a May 2025 survey we ran with AlixPartners, 68 percent of 300 U.S. CEOs had already raised or were considering raising prices, and 67 percent said their vendors had already raised prices on them. The alternative suppliers you scouted back then and passed on are worth another look now.

Then do the arithmetic—and be careful which line you run it on. A tariffed component that’s a small share of your costs is a rounding error, and you should probably eat it rather than cross a price threshold that spooks buyers. A tariffed core input is a different animal. If the thing that got hit is most of your cost of goods, 50 percent isn’t a margin conversation—its an existential conversation.

“You can no longer assume these little pass-through tariffs that you can get away with,” he says. “You have to ask yourself, ‘If I have to take it on the chin and double my price, what does that do to my plant from a volume perspective? And then am I in business? Am I laying off people?'”

Most companies have never modeled this kind of sudden cost jump because there was no reason why they would—natural markets don’t have sudden 50 percent cost jumps without government intervention. Producers know what their product does at today’s price but have no idea what it does at 1.5x. Build the model asap—the answer tells you whether your play is survive, reformulate or resource.

The bigger thing, which isn’t Canada, or tariffs

Tariffs turn on and off. What Echter counsels more and more is that you not let the current challenges around tariffs obscure the longer term, systemic issue: national debt that’s soaring, borrowing costs that aren’t coming down and inflation settling in higher for longer. Stack that on top of tariff-driven increases and you get a durable change in how markets behave.

“All executives are moving into a world of higher prices which should result in lower volumetric growth; but we’re transitioning from the 2010s where the world was hold price and grow volume,” he says.

The car business is the coal mine canary. Industry-wide, car sales volume is down roughly a million and a half units over the last few years and no one in the business is expecting them to return. In response, the vehicle that’s vanishing is the entry-level one. “They’re all starting to make higher end cars chasing the ‘high willingness to pay’ customer segments to make their businesses work.”

There’s opportunity here. Every incumbent walking upmarket at once leaves a door open at the bottom which is how you get an INEOS Grenadier where a cheaper Land Rover used to be.

His hometown supplies a cautionary case study. Genesee Brewing in Rochester, New York got to be one of the largest breweries in America, now that’s a problem. “It’s too big for the local market,” he says. “And nobody wants to make that much of one product anymore. They have this 747 of a brewery sitting in Rochester when everyone wants to fly Embraers.”

What to do? It has nothing to do with Canada and won’t expire when these tariffs do: “Instead of having one plant making one product and selling a thousand units, you need to start preparing now for a new world of flexibility. You have to get that plant making 10 products at 10 different price points if you want to still sell a thousand, because everything is fragmenting.”

Which means the thing worth building this fall isn’t a tariff response. It’s a habit. “You can make a couple of fast actions, monitor what’s going on and try to move quickly, but the more elegant thing is being able to deconstruct your product portfolio to constantly ask yourself, ‘Where am I adding value? How is the value shifting? What is approximately that value? And how should I price for it?’ That’s a muscle that companies would always benefit by building.”