The rise of tariffs in the trade relationship between the U.S. and Canada means Canadian businesses must quickly adapt in order to survive and thrive. The current trade environment cannot be avoided, but there are solutions for navigating U.S. tariffs.
Build a tariff plan to protect your business
While stockpiling inventory south of the border or temporarily absorbing the financial impact can be effective in the short term, adapting to the changing tariff and trade landscape requires a more strategic, pragmatic approach that assesses the potential impact on your company's financial performance and long-term value.
Our Tariff Adaptation Solution is a three-step framework designed to help companies build strategies to respond to tariffs, as well as strengthen business resilience and create value in any economic environment.
We work with you to clarify and quantify the potential impact of tariffs, including:
- Mapping your company’s exposure to inbound and outbound tariffs with BDO’s Tariff Original Value Analytics (TOVA) tool and analyzing sales and purchases, to identify immediate tariff engineering opportunities.
- Estimating the financial impact of tariffs on your business using a practical, simplified modeling approach based on agreed-upon assumptions.
- Assessing the structural impacts of tariffs on your industry and its value chains, and how they translate into risks and opportunities for your business.
- Identifying breaking points and business continuity risks.
Next, we identify and discuss short- and longer-term mitigation and adaptation options through facilitated discussions on key topics:
- Operational flexibility: How quickly and/or to what extent can your assets and resources be resized or repurposed?
- Cost and value chain efficiency: How can your supply chains and costs be optimized to expand margins?
- Sourcing flexibility: How fast and to what extent can your U.S. purchases be replaced or sourced within Canada or elsewhere?
- Market adaptability: Can your U.S. sales be replaced or pivoted to domestic or other international markets? To what extent will your business benefit from the proposed elimination of interprovincial barriers?
- Strategic flexibility: Are you able to pivot to other market or business opportunities?
The final step is an action plan based on the outcomes of the previous steps, with the following key components:
- A list of short- and longer-term tactical and strategic initiatives to mitigate the impact of tariffs and adapt your business.
- Prioritized initiatives based on the extent of mitigation and/or benefits, estimated time required to execute and realize benefits, ability to execute, investment required, and other selected criteria.
- Recommendations and next steps to move forward with execution.
BDO can help
Our multidisciplinary team is standing by to support your business as the trade situation evolves. Along with our wide range of industry experience, our knowledge of customs and international tax, transfer pricing, financial modeling, value creation, and strategy allows us to help your business adapt to the new tariff reality.
Contact us to discuss your company's tariff plan and long-term business strategy
To learn more about how tariffs could impact your organization, visit our tariff readiness hub for the latest insights on navigating ongoing trade challenges.