A Quick Summary and Overview
The trade policies of the post-Trump era have instigated profound shifts in the relationship between Canada and the United States. There is now a much sharper focus on domestic manufacturing and national security. All of this raises serious questions about the future of cross-border supply chains and eventually even the very concept of free trade.
The next major test for all of this is the USMCA (United States-Mexico-Canada Agreement) review in 2026. Even without any potential confounding issues that could arise between now and then, that review is already shaping up in my mind as a major possible inflection point in this relationship.
Introduction
Every day, nearly $2 billion in goods and services flow between the United States and Canada, making this one of the largest bilateral economic relationships in the world. But in recent years, trade policies have changed—varying by the week or by the day—creating uncertainty for companies on both sides of the border. For Canadian businesses, the switch in trade rules presents opportunities even as it poses challenges.
What precisely has transformed in the trade environment, and what should your company be poised for? The evolution from a production-based economy to today’s—well, what exactly is today? And what will tomorrow be? Between heightened national security concerns, the forthcoming review of the new NAFTA (the USMCA), and our ongoing trade dispute with China, the trade landscape is shifting beneath our feet. For companies managing cross-border supply chains, these tectonic changes require not just attention but strategic adaptation.
In this article, we’ll break down the key policy changes, explore their real world impact on Canadian businesses, and share practical strategies to navigate this new trade environment successfully.
Understanding Post-Trump Trade Policies
The current U.S. administration has maintained and expanded many trade approaches from the previous administration while adding new dimensions. At the core of post Trump trade policies is an emphasis on creating a production based economy that prioritizes North American manufacturing over imports from overseas markets.
This shift manifests in several key ways that directly affect Canadian businesses:
First, there’s a strong focus on reviewing and potentially renegotiating existing trade agreements. The USMCA (which replaced NAFTA) faces a mandated review in 2026, creating uncertainty about future trade terms. U.S. trade officials are already preparing for this review, examining how the agreement impacts American workers and industries.
Second, trade decisions are now closely linked to national security considerations. This is especially noticeable in the technology sector, where cybersecurity and data privacy concerns have an impact on legislation. The impacts of the ongoing TikTok ban show how security issues can upend established supply chains and business models.
Third, there’s increased enforcement of trade rules, with stricter monitoring of compliance across borders. Canadian exporters face more scrutiny regarding rules of origin, labor standards, and environmental practices.
For businesses operating cross border supply chains, these policy shifts require careful monitoring and strategic planning. Companies that previously relied on predictable trade flows must now prepare for potential disruptions and compliance challenges. Working with experienced logistics partners like MacMillan Supply Chain Group can help businesses stay ahead of these changes and adapt their supply chain strategies accordingly.
The Evolution of Canada-US Trade Relations
The relationship between Canada and the U.S. has always been complex, balancing economic interdependence with national interests. Recent post-Trump trade policies have added new dimensions to this dynamic, requiring a fresh Canadian trade strategy.
Historically, Canada has been America’s largest trading partner, with deeply integrated supply chains across numerous industries. However, this relationship has faced significant tests in recent years:
The renegotiation of NAFTA into the USMCA brought stricter rules of origin requirements, particularly in the automotive sector. Canadian manufacturers now need to ensure higher North American content percentages to qualify for duty free treatment. This shift aligns with the production-based economy focus that continues to drive U.S. trade policy.
Buy American provisions have expanded, creating challenges for Canadian companies selling to U.S. government entities. These policies prioritize U.S.-made products for government procurement, potentially limiting opportunities for Canadian exporters.
Tariff threats remain a concern, with aluminum and steel sectors experiencing periodic uncertainty. Though many Section 232 tariffs have been resolved, the precedent creates ongoing risk for cross-border trade.
Digital trade has emerged as a new frontier, with data security measures becoming increasingly important. Canadian businesses handling U.S. customer data must navigate evolving privacy regulations and security requirements.
Despite these challenges, opportunities exist. The shared focus on reducing dependence on Chinese manufacturing has created openings for Canadian suppliers. Additionally, collaborative approaches to clean energy and critical minerals development present growth potential for Canadian exporters.
For businesses navigating these changes, understanding the nuances of Canada-US trade relations is essential. MacMillan Supply Chain Group helps clients leverage these evolving dynamics by optimizing cross-border logistics and ensuring compliance with changing regulations.
USMCA Review What It Means for Businesses
The USMCA review scheduled for 2026 represents a pivotal moment for businesses operating across North American borders. This mandatory assessment could maintain the status quo or trigger significant changes to the agreement that governs nearly $1.5 trillion in annual trade.
Key aspects of the USMCA review that businesses should monitor include:
Labor provisions enforcement will likely intensify. The agreement’s labor chapter includes unprecedented protections for workers, and U.S. officials have already used the Rapid Response Labor Mechanism to investigate facilities in Mexico. Canadian businesses with operations or suppliers in Mexico should evaluate labor compliance proactively.
Automotive rules of origin requirements could tighten further. The current 75% North American content threshold for duty free treatment might increase, pushing more manufacturing back to the continent. Supply chain mapping becomes essential to understand exposure to potential changes.
Digital trade rules may evolve as technology advances. The USMCA was the first U.S. trade agreement with comprehensive digital trade provisions, but rapid technological change could necessitate updates to address emerging issues like AI and data security measures.
Environmental standards enforcement will likely increase, with greater scrutiny of compliance across borders. Companies should document their environmental practices and prepare for potential verification requests.
For Canadian businesses, preparing for the USMCA review means conducting a thorough assessment of supply chains, identifying vulnerabilities, and developing contingency plans. This might include diversifying supplier networks, investing in compliance documentation systems, or adjusting inventory strategies to buffer against potential disruptions.
MacMillan Supply Chain Group helps clients prepare for these changes by providing visibility into complex supply chains, identifying compliance gaps, and implementing solutions that maintain business continuity regardless of how the USMCA review unfolds.
Security and Trade: The TikTok Ban Implications
The ongoing TikTok controversy highlights how national security concerns increasingly influence trade policies. This case study offers valuable insights for Canadian businesses navigating the new security focused trade landscape.
The TikTok ban implications extend far beyond a single app. They signal a fundamental shift in how governments approach technology companies with foreign connections, particularly those with ties to China. Project Texas TikTok’s attempt to isolate U.S. operations and data demonstrates the lengths companies must go to address security concerns.
Several things can be learned by Canadian companies:
For cross-border businesses, data security precautions are now essential. Strong data governance frameworks, such as explicit data storage regulations, access controls, and third party risk management, are essential for businesses handling sensitive data. This is particularly important for companies in the technology, healthcare, and financial services industries.
Supply chain transparency requirements are increasing. Businesses must understand not just their direct suppliers but also the ownership structures and security practices of technology vendors throughout their supply chain. This “know your supplier’s supplier” approach helps identify potential security risks before they trigger regulatory action.
Compliance costs are rising as security standards evolve. Investments in cybersecurity, data protection, and regulatory compliance represent a growing operational expense that businesses must factor into their planning.
The security trade nexus creates particular challenges for Canadian companies caught between U.S. security concerns and economic ties to China. Navigating these competing pressures requires careful strategic planning and sometimes difficult choices about market priorities.
MacMillan Supply Chain Group helps clients address these challenges through secure logistics solutions that meet evolving compliance requirements. Our technology platforms provide the visibility and documentation needed to demonstrate supply chain security to partners and regulators alike.
Common problems with navigating post-Trump trade policies
There are a number of serious problems Canadian businesses have to deal with in trying to adapt to the trade policies of the Trump administration: Canadians are generally more friendly to global trade than Americans. We believe freer trade means more jobs and better living standards. By contrast, almost half of all Americans think trade is a bad thing. Even if you leave aside the more general anti-trump factor, the main policies that are coming out of the Trump administration are pretty much all policies that the Canadians are against.
Regulatory Uncertainty
When policy changes, it is often with very little notice, and this makes long-range planning accordingly difficult. We find that companies invest in us with far greater levels of commitment when they are certain that the rules of the economic engagement will not change unexpectedly.
Compliance Complexity
Meeting multiple jurisdictional requirements has become very difficult. Varying documentation standards, differing verification processes, and diverse enforcement styles make the administrative burden nearly unbearable.
Supply Chain Disruptions
Established sourcing patterns have been disrupted by the trade tensions with China. Companies must now find alternative suppliers or relocate production. These transitions don’t come easy. They’re often fraught with cost and quality control challenges.
Data Security Requirements
Tighter data security restrictions make it harder—both technically and legally—for firms to function across frontiers. They also muddy the water around some fundamental questions that arise in any discussion of digital commerce: Where can you store data? Where can you process it? Where can you access it?
Tariff Volatility
Nonetheless, some industries must still grapple with the occasional threat of tariffs or even the imposition of actual duties, despite the protections offered under USMCA. This unpredictability complicates pricing strategies and profit margins. It’s a little funny, in a painful way, that the very sectors that are most productive at creating new jobs are the ones sowing new seeds of uncertainty.
Labor Compliance Documentation
Improving labor rights under the USMCA mandates better and more comprehensive documentation of workplace practices along the entire supply chain.
Qualification Thresholds
Ensuring compliance with rules of origin for duty-free treatment has become more difficult, especially in areas such as automotive and textiles where the thresholds for regional content have gone up.
Increased Border Delays
More critical examination of shipments at the border frequently results in delays in inspection. This affects the just-in-time delivery schedule and increases logistics costs.
Technology Transfer Restrictions
Limitations on new technologies restrict some partnerships and funding—especially in the rapidly growing advanced manufacturing, AI, and quantum technology sectors. Why? Because the highly selective nature of the partnerships and investments raises the possibility that the U.S. government might be enabling the export of these sensitive technologies.
Strategic Decision Paralysis
Several businesses find it difficult to make clear, strategic decisions regarding their markets, suppliers, and investment priorities because there are so many parts moving in the trade environment.
Our solutions
At MacMillan Supply Chain Group, we’ve developed comprehensive solutions to help Canadian businesses navigate the complexities of post Trump trade policies:
Trade Policy Intelligence: Our dedicated team monitors policy developments across North America, providing clients with early warnings about potential changes that might affect their operations. This intelligence helps businesses prepare for shifts in the Canada US trade relations landscape before they impact bottom lines.
Compliance Management Systems: We’ve built robust documentation platforms that track product origins, labor compliance, and environmental standards throughout the supply chain. These systems generate the verification documentation increasingly required under USMCA provisions, reducing administrative burdens while ensuring compliance.
Diversified Logistics Networks: To address China trade tensions and supply chain vulnerabilities, we’ve established flexible logistics networks that can quickly adapt to changing sourcing patterns. Our warehouse facilities across Canada provide strategic inventory positioning that buffers against border delays and supply disruptions.
Secure Data Management: Our technology platforms incorporate advanced data security measures that meet or exceed regulatory requirements for cross border data flows. We maintain strict segregation of sensitive information and implement encryption standards that satisfy both Canadian and U.S. regulatory frameworks.
Customs Expertise: Our in-house customs specialists help clients navigate tariff classifications, valuation issues, and duty drawback opportunities. This expertise is particularly valuable as enforcement intensifies under post-Trump trade policies.
Strategic Inventory Management: We develop customized inventory strategies that balance just-in-time efficiency with risk mitigation. By positioning critical inventory strategically across our network, we help clients maintain service levels despite potential border disruptions.
Supplier Compliance Programs: We help clients implement verification systems for supplier practices, ensuring they meet labor, environmental, and security standards required under current trade agreements.
Technology Integration: Our systems integrate seamlessly with client ERP platforms, providing real time visibility into cross border shipments and compliance status. This integration helps businesses respond quickly to potential issues before they become costly problems.
Scenario Planning Support: We work with clients to develop contingency plans for various trade policy scenarios, from USMCA modifications to new security requirements. These plans include alternative routing options, supplier diversification strategies, and compliance roadmaps.
Continuous Improvement Processes: As trade policies evolve, so do our solutions. We maintain a rigorous improvement cycle that incorporates policy changes, client feedback, and industry best practices to ensure our services remain at the cutting edge of cross-border supply chain management.
By combining these solutions with our extensive logistics infrastructure and decades of experience in Canada-US trade, MacMillan Supply Chain Group helps clients not just survive but thrive in the complex post Trump trade environment.
How to navigate post-Trump trade policies with MacMillan Supply Chain
Navigating the complexities of post-Trump trade policies doesn’t have to be overwhelming. Here’s how your business can proactively adapt with MacMillan Supply Chain Group as your partner:
- Start with a comprehensive supply chain assessment. Our team will analyze your current cross border operations, identifying potential vulnerabilities to policy changes. We’ll map your product flows, compliance requirements, and data management practices to create a clear picture of your exposure to trade policy shifts.
- Develop a tailored compliance strategy that addresses your specific industry challenges. Whether you’re concerned about USMCA review implications, China trade tensions, or data security measures, we’ll create a roadmap that ensures your operations remain compliant while minimizing administrative burden.
- Implement strategic inventory positioning across our network of warehouses. By maintaining buffer stocks in key locations, you can protect against border delays and supply disruptions while still meeting customer delivery expectations. Our warehouse facilities in the Greater Toronto Area provide ideal positioning for serving both Canadian and U.S. markets.
- Leverage our customs expertise to optimize tariff classifications and duty treatments. Our specialists stay current on changing regulations and can identify opportunities to reduce costs while ensuring compliance with increasingly strict enforcement regimes.
- Utilize our technology platform for real-time visibility and documentation. Our systems track shipments, maintain compliance records, and generate required certifications, giving you confidence that your cross-border supply chain meets all regulatory requirements.
- Participate in our quarterly trade policy briefings where we share insights on emerging trends and potential policy shifts. These sessions help you stay ahead of changes rather than reacting to them after implementation.
Ready to transform trade policy challenges into competitive advantages? Contact MacMillan Supply Chain Group today to schedule a consultation with our trade specialists. Our team will assess your current operations and develop a customized strategy that ensures your supply chain remains resilient regardless of policy changes.
Don’t let trade uncertainty limit your business potential. Partner with MacMillan Supply Chain Group and gain the expertise, infrastructure, and technology you need to thrive in today’s complex trade environment.
Call us at 416-941-2759 or email [email protected] to get started.
FAQS
Canadian exporters face both challenges and opportunities under these policies. While there's increased pressure to comply with stricter rules of origin and security requirements, companies that adapt can benefit from more integrated North American supply chains. The emphasis on reducing dependency on overseas suppliers may create new opportunities for Canadian manufacturers, especially those offering products that complement rather than compete with U.S. production.
The 2026 review will likely focus on evaluating how effectively the agreement has supported North American manufacturing, labor standards, and environmental goals. Potential changes could include stricter rules of origin requirements, enhanced labor enforcement mechanisms, and updated digital trade provisions. Canadian businesses should prepare by ensuring current compliance and documenting the positive impacts of the agreement on their operations.
Building resilience starts with visibility—understanding your complete supply network, including secondary and tertiary suppliers. Develop contingency plans for critical components, consider dual-sourcing strategies, and maintain strategic inventory buffers. Investing in technology that provides real-time supply chain data helps you respond quickly when disruptions occur. Working with a partner like MacMillan Supply Chain Group can provide additional flexibility through shared resources and expertise.
Comprehensive documentation is essential and should include certificates of origin, detailed bills of materials showing country of origin for components, supplier certifications, and records of compliance with labor and environmental standards. Maintain documentation of security protocols, particularly for products in sensitive categories or those containing advanced technologies. Digital record-keeping systems help ensure this information is readily available during audits or inspections.
Tech companies face increased scrutiny regarding data handling, foreign investment, and supply chain security. Canadian firms should implement robust data governance frameworks, carefully document security protocols, and be prepared for enhanced due diligence when entering U.S. markets or seeking American investment. Companies with connections to countries deemed security risks may face additional compliance requirements.
Automotive, technology, steel and aluminum, agriculture, and pharmaceuticals face the most significant impacts. These sectors are either strategic priorities or have been specifically targeted in trade actions. Companies in these industries should pay particular attention to policy developments and may need to make more substantial adjustments to their business models.
Small businesses can manage costs by focusing on high-risk areas first, leveraging industry associations for shared resources, and considering partnerships with specialized service providers. Technology solutions that automate compliance processes often provide good return on investment. Industry-specific templates and checklists can help streamline compliance efforts without requiring extensive customization.
While Canada isn't directly involved in IPEF, this framework signals U.S. interest in developing alternative trade relationships in Asia. Canadian companies may face increased competition in these markets as U.S. firms gain preferential access. However, opportunities exist to participate in supply chains that connect North America to Indo-Pacific markets, particularly in sectors where Canadian businesses have established expertise.
Develop a clear understanding of which data must remain in specific jurisdictions and implement systems that segregate information accordingly. Cloud-based solutions with region-specific storage can help manage these requirements efficiently. Document your data governance framework and be prepared to demonstrate compliance during regulatory reviews. Consider working with specialized partners who understand the nuances of cross-border data management.
Government agencies like Global Affairs Canada provide regular updates on trade policies. Industry associations often offer sector-specific guidance and early warnings about potential changes. Commercial services like trade compliance databases can help track regulatory developments. Working with a knowledgeable supply chain partner like MacMillan Supply Chain Group gives you access to practical insights about how policy changes affect day-to-day operations.
