Founders Still Struggling with Trade Uncertainty as U.S. Tariffs on Key Sectors Loom
Canadian businesses may have dodged the worst of the United States’ latest trade crackdown, but for many entrepreneurs, the uncertainty isn’t going away anytime soon.
On Wednesday night, U.S. President Donald Trump unveiled a sweeping tariff package affecting over 60 countries—but notably, Canada and Mexico were left off the list. While that might sound like good news, the fine print tells a different story:
- Existing tariffs on non-CUSMA-compliant Canadian goods (like some energy products and potash) will remain at 25% and 10%, respectively.
- Trump signaled potential future tariffs on pharmaceuticals, semiconductors, and lumber—three critical sectors for Canada.
- All foreign cars will now face a 25% tariff, though it’s unclear how CUSMA rules will factor into this.
For Canadian startups, this means the economic limbo continues.
Nothing changes for us. We’re still operating under constant uncertainty.
– Ben Bergen, President, Council of Canadian Innovators (CCI)
A Trade War with No End in Sight
At a press conference following Trump’s announcement, Prime Minister Mark Carney tried to reassure Canadians that key aspects of the Canada-U.S. trade relationship were still intact. But he also acknowledged that the fight isn’t over.
We are going to fight these tariffs with countermeasures, we are going to protect our workers, and we are going to build the strongest economy in the G7.
– Prime Minister Mark Carney
Yet for entrepreneurs, government promises don’t pay the bills. A survey by MaRS and Communitech found that:
- 75% of Canadian startups have already been affected by trade instability.
- 41% expect revenue declines in 2025 due to the tariffs and economic slowdown.
- 11% are considering layoffs because of rising costs and supply chain disruptions.
For some, the impact is already being felt. Lightspeed Commerce, a major Montréal-based payments company, recently downgraded its 2025 revenue outlook, citing uncertainty from the trade war as a key factor.
Tariffs and trade wars certainly play a role in making market conditions more volatile.
– Dax Dasilva, CEO, Lightspeed Commerce
Startups Demand Action, Not Just Words
Many founders say Canada needs a long-term strategy to reduce its reliance on U.S. trade. Industry leaders, including the Council of Canadian Innovators, have called for:
- Increased government procurement of Canadian-made tech and products.
- Stronger support for startups entering global markets outside North America.
- More investment in high-value industries like AI, clean energy, and biotech.
For now, entrepreneurs are stuck in survival mode, trying to plan for an unpredictable future.
We’ve built our businesses on the idea that the U.S. is our most stable partner. Now, that assumption feels riskier every day.
– Jean-Simon Fortin, CEO, Paperplane Therapeutics, potential new tariffs on semiconductors, pharmaceuticals, and lumber looming, one thing is clear: Canada’s tech industry isn’t out of the woods yet.
