CME Survey Highlights Severe Impact of U.S. Tariffs on Canadian Manufacturers

On Jan 14, 2025

OTTAWA — The Canadian Manufacturers & Exporters (CME) organization has released troubling survey results showing that nearly 90% of Canadian manufacturers could face significant or severe consequences if the U.S. implements tariffs on Canadian imports. These findings underscore the pressing economic threat to a sector that contributes 10% of Canada’s GDP, employs 1.8 million people, and generates over 60% of the country’s goods exports.

Conducted between December 11 and 18, 2024, the survey of over 300 manufacturers revealed widespread pre-emptive measures being taken to mitigate the looming risks. These include accelerating shipments to the U.S. (30%), postponing planned investments (30%), and implementing hiring freezes (22%). However, the potential economic fallout extends beyond these initial steps.

Anticipated Business Impacts

If tariffs are imposed, nearly half of the surveyed manufacturers report they would consider:

Implementing hiring freezes or workforce layoffs (48%)
Postponing or cancelling planned capital investments (46%)
Shifting portions of their production to U.S. facilities (49%)

This shift in production highlights a double-edged consequence: mitigating tariff costs could come at the expense of Canadian jobs and economic activity.

Call for Government Intervention

Dennis Darby, President and CEO of CME, urged governments to take proactive measures to safeguard the industry, stating, “Tariffs will endanger nearly $600 billion in exports to our largest trading partner, two-thirds of which are manufactured goods. These findings show why we need an urgent and coordinated response from governments to protect manufacturing businesses, workers, and families. Failure to do so will be devastating for our economy.”

The survey revealed that manufacturers are calling for government support through:

Tax relief measures, such as deferring or reducing corporate taxes (56%)
Temporary financial assistance to support employee retention (45%)

Economic Implications

With the manufacturing sector playing a central role in Canada’s economy, any disruption from tariffs could have ripple effects across the country. This sector not only supports millions of direct jobs but also sustains the livelihoods of families and communities that depend on its stability.

The CME survey highlights the urgency for Canadian governments to act decisively in response to the potential tariffs. Without intervention, the cascading effects of job losses, production shifts, and reduced investments could be devastating for the nation’s economic future.

For further information, visit Canadian Manufacturers & Exporters (CME).