Turning US Tariffs Into a Competitive Edge: A Playbook for Canadian Businesses

The recent wave of US tariffs has left many Canadian businesses grappling with rising costs while being unable to pass these increases to customers due to inflation concerns. While politicians prescribe price controls to shield consumers, businesses must look inward for solutions. But here's the good news—uncertainty can be a silver lining.

1. Optimize Costs and Improve Margins

Since price hikes may not be an option, now is the time to aggressively pursue cost optimization. Businesses should focus on:

• Optimizing Borrowing Costs: Reassessing debt structures, refinancing at favorable rates, and leveraging government-backed financing options.
• Improving Working Capital: Tightening credit policies, negotiating better payment terms, and accelerating receivables collection.
• Eliminating Waste: Conducting process audits to identify inefficiencies, reducing raw material waste, and streamlining operations.
• Scrutinizing Discretionary Spending: Cutting non-essential expenses while ensuring investments align with long-term strategic goals.

2. Winning in Uncertainty: The Pricing Game

While weaker businesses hesitate in times of ambiguity, strong businesses see it as an opportunity. History is filled with examples of companies that thrived in uncertainty:

• Amazon doubled down on innovation and cost control during downturns.
• TCS (Tata Consultancy Services) expanded its global footprint during economic turbulence.
• Boeing capitalized on geopolitical shifts to redefine global supply chains.

The lesson? Don’t let today’s uncertainty become tomorrow’s regret. If competitors hesitate, this is the perfect time to gain market share and build resilience.

3. Turn Tariffs into a Competitive Advantage

Tariffs are shifting consumer sentiment and government priorities. Made in Canada has never been more relevant. Canadian consumers, retailers, and policymakers are actively seeking homegrown alternatives. Businesses should:

• Leverage “Made in Canada” as a premium brand advantage.
• Engage policymakers to advocate for local support and incentives.
• Double down on marketing and visibility in Canada-first retail channels.

4. Rethink Your Operating Model: Outsourcing & Automation

There’s a silver lining—this might be the perfect time to rethink how you operate. Exploring outsourcing and automation can drive:

• Cost efficiencies through strategic partnerships and nearshoring.
• Process improvements to eliminate redundant tasks.
• Real-time insights via AI and data analytics for better decision-making.

Final Thoughts

Rather than viewing tariffs as a crisis, Canadian businesses should see them as a catalyst for reinvention. By optimizing costs, playing the pricing game strategically, leveraging national sentiment, and innovating operations, businesses can turn challenges into long-term competitive advantages.

The next move is yours—will you adapt and lead, or wait and react?

Brace yourselves, CPG and F&B leaders—costs are rising, but prices can’t.

Politicians such as Chrystia Freeland are pitching a plan to lower food prices by capping profit margins and outlawing "shrinkflation".

With rising tariffs driving up costs and policymakers urging grocers not to pass these increases to consumers—CPG and Food & Beverage companies in Canada face a tough balancing act.

Since price hikes may not be an option, the focus must shift internally to optimize costs and improve margins.

Here’s how:

? Optimize Borrowing Costs: Interest rates have come down.

If your borrowing costs don’t reflect this, it’s time to renegotiate.

Every basis point matters.

? Improve Working Capital Efficiency: Target negative working capital—optimize inventory levels, secure better payment terms from vendors, and ensure faster collections from customers through better cash flow planning.

? Eliminate Waste:

?? Reduce changeover time & overtime.

?? Lower packaging costs & renegotiate MOQs.

?? Leverage Vendor Managed Inventory to reduce holding costs.

?? Rationalize SKUs—cut the long tail & minimize obsolescence.

?? Monetize SLOBs (Slow-moving & Obsolete Inventory) via media credits, alternative channels, or discount strategies.

? Scrutinize Discretionary Spending:

?? Use CAC & ROAS to assess marketing spend effectiveness.

?? Measure Trade Spend ROI to ensure promotions are truly driving growth, not just subsidizing sales.

In an environment where external pressures are limiting price flexibility, internal efficiency is the only way to protect margins and stay competitive.

Looping some Industry Leaders for what strategies they are using to navigate these challenges? Drop your thoughts below! ??

Every time uncertainty looms—be it a potential recession, US tariffs, or political turbulence—many business owners freeze.

They wait, watch, and hope for clarity.

But here’s the truth: uncertainty never disappears.

It just changes shape.

And those who price it, rather than fear it, come out on top.

Weak businesses see ambiguity and hit pause.

Strong ones see it as a pricing game.

?? 2008 Financial Crisis – While most companies cut spending, Amazon doubled down on AWS, cementing its dominance.

?? Y2K Panic – While some companies hesitated, Indian IT firms like Infosys and TCS capitalized, catapulting into global giants.

?? Post-9/11 Uncertainty – Boeing pushed ahead with the 787 Dreamliner, reshaping aviation economics.

Every problem is an uncertainty-pricing game.

? Investing in new capex when competitors hesitate? Higher market share later.

? Reformulating products to de-risk tariffs? Future-proofing margins.

? Scanning supply chains to promote “Made in Canada”? Competitive edge in geopolitics.

Inaction is also a decision—but often the worst one.

Don’t let today’s uncertainty become tomorrow’s regret.

Price the risk. Take the leap.

What bold move are you making in 2025?

?? Please share in Comments below, even few words is fine.

Call me weird, but I have a habit of finding silver linings in every crisis.

While the world worries about US tariffs—impacting GDP, jobs, and competitiveness—have you considered how this could actually be your golden opportunity?

If you’re a Canadian company that’s been competing with US brands, this is your moment to leverage the surge in economic nationalism.

Canadian consumers, retailers, and policymakers are actively looking to support homegrown brands—and you need to make sure they see you.

?? Here’s how you turn tariffs into an advantage:

?? Double Down on 'Made in Canada' – Instead of discounting to stay competitive, invest in your brand story.

Showcase your Canadian manufacturing, job creation, and contributions to the economy. ????

?? Leverage Government Support – Lobby local governments and retailers to back Canadian businesses.

Tap into grants and tax breaks for manufacturing, job creation, AI adoption, and scientific research. (Check out programs like the Strategic Innovation Fund, SR&ED, and provincial tax credits.)

?? Access Low-Cost Funding & Credit Support – Canadian institutions like BDC offer lower-cost financing, while EDC can provide credit insurance to de-risk your exports.

Instead of seeing tariffs as a roadblock, use them as a launchpad.

The market is shifting—will you ride the wave or get swept away?

Who’s already leveraging this trend? Let’s discuss. ????

?? “Do what you do best, and outsource the rest.” – Peter Drucker

With rising costs due to US tariffs and global economic pressures, companies are being squeezed from all sides.

But there’s a silver lining—this might just be the perfect time to rethink your operating model.

Did you know?

? Outsourcing finance functions can save 20-30% in costs

? Specialized outsourcing partners offer cutting-edge automation and skilled manpower

? Many top firms already outsource HR, IT, marketing, sales, and finance to stay lean and focused

?? Why Outsource?

1?? Cost Efficiencies & Unlocks – Imagine reallocating savings from outsourcing your finance team into core operations or innovation.

2?? Process Improvements – Experts who do one thing exceptionally well bring efficiency and precision.

3?? Automation & Real-Time Insights – AI, chatbots, and dashboards give you faster, smarter decision-making tools which are often being invested by such specialized service providers.

?? How to Outsource Right

? Start Small – Test the waters. Before you outsource your entire Finance function, consider outsourcing just with Accounts Payable for a major invoice type.

? Choose the Right Model – Onshore? Offshore? Hybrid? Ensure time zone coverage and cultural fit.

? Pilot Before Scaling – Work out kinks before rolling out fully.

? Know Your Exit Strategy – Understand contract terms, termination clauses, and hidden costs.

?? The best businesses double down on their strengths and let the experts handle the rest.

If you’re thinking about outsourcing finance, let’s discuss how a Fractional CFO can help you make that transition smooth and profitable.

Would you consider outsourcing a business function in 2025?

Why or why not? Drop your thoughts in the comments! ??

Disclaimer: This newsletter is for informational purposes only and does not constitute financial, legal, or business advice. Readers should conduct their own research and consult professional advisors before making business decisions. The author and publisher are not responsible for any actions taken based on this content.