Canada’s Counter-Tariffs Are a Negotiation, Not a Cost Problem

Canada’s counter-tariffs on about $20 billion of U.S. goods took effect September 8. Duties of 15%, 25%, and 50% on more than 700 products.

Right now, somewhere in Toronto, a buyer is drafting the email that asks who absorbs it.

That email is the negotiation. The first supplier reply sets the position for every pass-through conversation that follows, and most companies will answer it four times.

Sales says what it thinks it can pass through. Procurement says which cost changes are real and how long they last. Finance sizes the exposure. Supply chain says which commitments still stand and whether an alternate source exists.

Each answer is reasonable. Together they hand the buyer four positions and an invitation to pick the cheapest one.

The smart buyers do exactly that, by quoting the sales rep back to finance, asking supply chain about the alternate source, and asking sales why the price didn’t move.

You treat the tariff as the supplier’s problem and the joint plan as untouchable.

What most teams miss is that a tariff cuts both ways. It’s a change in the cost base neither party controlled. That is grounds to reopen an agreement, and grounds for the supplier to reopen it, too.

Absorbing cost is a concession, and concessions get traded, not given.

If the supplier eats 25 points of duty on a line, the customer can give something back: a volume commitment, a longer term, a listing that was stuck, a promotion the supplier was never going to fund.

Before the buyer’s email lands, four things need to be one position:

What passes through and what doesn’t. What the duty costs and how long it is expected to last. What the supplier wants in return for absorbing any of it. And the trigger, in writing, that reopens the agreement when the rate changes again.

Has your team written down what triggers a renegotiation with the customer? If not, the buyer will write it for you.

If your cross-border customers are asking who eats the tariff, it’s time to take action.