Two-thirds of Canadian businesses say they can withstand a tariff war that lasts more than a year: survey

Two thirds of businesses say they can withstand a tariff war with the United States that lasts more than a year, according to a new survey released on Tuesday by KPMG in Canada.

Joy Nott, a partner in KPMG’s customs and international trade practice, says companies have already put strategies in place to limit the tariff risk in their operations.

“A lot of companies have taken months and months of inventory and they’ve transferred it to the United States already,” said Nott. “So I’m talking to companies who have maybe moved six to eight months worth of inventory to the United States, which normally that stuff would have been stored in Canada and shipped across as needed.”

Nott says a remaining 30 per cent of businesses said they will face significant profit losses and three per cent would go out of business.

The survey, completed last Friday, collected the opinions of 602 large and mid-size businesses across Canada. Approximately half of the companies surveyed are involved in manufacturing, energy and natural resources, industries that are expected to be hardest hit by U.S. tariffs. The remaining businesses surveyed are involved in other industries, such as consumer and retail, agriculture, construction, financial services, transportation, infrastructure, technology and telecommunications.

Half of businesses surveyed say they are already reducing production and/or laying off employees in anticipation of tariffs and 28 per cent will start reducing headcount and production four to six months into a trade war. Half expect their headcount to decrease in Canada over the next year.

About half (46 per cent) of businesses say they have three to five alternative markets for their products other than the U.S. But 52 per cent of