Daniel Clark, Associate Professor of Entrepreneurship at Ivey Business School, provides his perspective on the 30-day Canada-U.S. tariff pause in this Impact opinion piece.
For nearly two weeks, Canadians waited in suspense as the threat of tariffs loomed, uncertain if the proverbial hammer would fall. Then, at the eleventh hour, a reprieve: 30 days without tariffs.
A win? Perhaps. At least better than the alternative. But this temporary relief feels less like a victory and more like the Sword of Damocles – dangling above us, ready to drop at any moment.
If his first presidency taught us anything, it’s that this is Trump’s playbook. He lobs a threat, squeezes out a concession, then pulls back – only to threaten again, demanding more the next time. It’s a cycle we’ve seen before, and for Canadians, this is just the opening chapter of what promises to be a long and exhausting list of demands.
So, what can Canada do? Rather than spending the next 30 days holding our breath, waiting to see if tariffs will strike, we should act now. Here are four initiatives Canada can immediately pursue to strengthen and expand our economy – both at home and on the global stage.
1. Impose clear labeling to make buying Canadian possible
Labeling products as Canadian would give consumers the clarity they need to make informed choices. But for that label to be meaningful, it must go beyond a simple sticker; it needs to distinguish between products that are merely imported, those repackaged in Canada, those fully manufactured here, and those made with substantial Canadian inputs. Is this system complicated and prone to error? Absolutely. But if you try to "buy Canadian right now" you can't do it. The desire is there – Canadians want to make better choices – but there are currently no avenues to make that possible, nor incentives for distributors to ensure it.
2. Bring back “Team Canada”
I’m not talking about costly, photo-op-heavy trade missions. What Canada needs is something far more practical: real government support to help businesses break into international markets. For most small companies, expanding abroad is simply too expensive to tackle alone. One approach might be a ShopCanadian web platform, basically Alibaba for Canadian products. The government could build and promote this digital marketplace in key global markets, making it easier for Canadian businesses to connect with international buyers and compete on a larger stage. France does this exceptionally well through a variety of public agencies.
3. Identify key strategic resources and limit single market sales
Canada’s wealth is built on its natural resources, like oil, gas, timber, and ore. Yet, we remain heavily dependent on selling them to a single customer: the United States.
A smarter approach would be to set quotas based on 2024 U.S. sales, with a gradually declining percentage allowed in any one market each year. By 2026, for example, firms might be limited to selling 95% of their 2024 U.S. volumes. They would then face a choice: sell less overall or expand into new international markets to balance the equation. In fact, they could even increase sales to the U.S., as long as they grow exports elsewhere even more.
4. Roll out more tax incentive holidays
Products with significant Canadian sourcing, manufacturing, and packaging should qualify for a tax holiday. This year has shown tax breaks are possible, and motivating, let’s expand their use.
These ideas may not align perfectly with the United States-Mexico-Canada Agreement, but then again, neither did Trump’s tariffs. The rules have already been bent in one direction; it’s time Canada learned to push back. The Sword of Damocles doesn’t just hang over us – it can swing both ways.
