Trump urges Canadian companies operating in the U.S. to move more business stateside

Trump pushes Canadian firms to expand in U.S.

President Donald Trump is turning up the pressure on Canadian companies with business ties to the United States, urging them to shift more operations south of the border. His latest message comes as tariffs, counter-tariffs, and trade negotiations reshape the business landscape between the two countries.

Canadian manufacturers are already reassessing where they produce goods and invest money, but the numbers reveal a more complicated picture than a simple move to America. Here’s what the latest developments show.

The appeal comes during a renewed trade dispute

Trump’s request comes during a renewed trade dispute between the United States and Canada. The latest disagreement followed unsuccessful negotiations over tariffs and broader trade conditions.

The United States began applying new 50% tariffs to certain Canadian goods on August 22. Canada responded by announcing additional tariffs on U.S. products, with its measures scheduled to begin September 8.

The new U.S. tariffs cover selected Canadian goods

The latest U.S. measures do not apply to every Canadian product entering the United States. The 50% duties cover specified goods under Section 338 of the Tariff Act of 1930.

The White House said the measures respond to what it describes as Canadian discrimination involving U.S. automobiles, alcoholic beverages, and dairy products. The Section 338 tariffs themselves cover hundreds of selected Canadian products, including goods such as wine, honey, cosmetics, hockey sticks, smartphones, furniture, and cement, while products already subject to Section 232 duties are excluded.

Canadian manufacturers are already changing production plans

A 2026 KPMG survey found that 42% of Canadian manufacturers had moved production to the United States or were considering doing so. The survey covered 275 Canadian manufacturing companies.

KPMG reported that 29% had already moved some or all production, while 13% planned to do so. Among companies considering relocation, 77% expected the move to occur within two years.

Trade uncertainty is affecting Canadian investment

Canadian manufacturers are also changing investment plans as trade conditions remain uncertain. KPMG found that 57% of surveyed manufacturers had paused, reduced, or canceled capital investment projects.

The same survey found that 42% had paused or reduced research and development spending. KPMG also reported that 52% of respondents described their companies as operating in what the survey called “endurance mode.”

Most surveyed manufacturers plan to keep their headquarters in Canada

Production decisions do not necessarily mean companies are moving their corporate headquarters. KPMG found that 80% of surveyed manufacturers planned to keep their headquarters in Canada.

At the same time, 11% said they planned to move their headquarters to the United States within five years. The survey therefore recorded more planned production movement than planned headquarters relocation among respondents.

U.S. market access remains important to Canadian manufacturers

Canadian manufacturers remain closely connected to the U.S. market. KPMG found that 61% of surveyed manufacturers agreed their businesses could not survive without access to the United States.

The survey also found that 86% of manufacturers export goods outside Canada. Among those exporters, 96% said their products were CUSMA-compliant, according to KPMG’s 2026 manufacturing survey.

Interesting fact: Canada remains highly dependent on the U.S. export market.

CUSMA remains in force during the dispute

CUSMA remains in force while the United States, Canada, and Mexico continue reviewing the agreement. It entered into force on July 1, 2020, replacing NAFTA.

The first mandatory joint review took place on July 1, 2026. The United States declined to extend the agreement at that review, so annual reviews will continue. CUSMA remains in force and does not automatically expire until 2036 unless its status changes through the review process.

Interesting fact: U.S.-Canada trade totaled about $719.5 billion in goods during 2025.

Canada suspended trade negotiations in August

Canada suspended its trade negotiations with the United States on August 21, after saying proposed U.S. terms did not meet Canadian objectives. Canadian Prime Minister Mark Carney directed negotiators to return to Ottawa.

Canada had sought tariff relief and greater stability for Canadian businesses. The suspension occurred one day before the new U.S. tariffs on selected Canadian goods took effect.

Canada announced matching counter-tariffs

Canada announced additional tariffs on U.S. goods after the new American duties took effect. The Canadian government said its response would match the new U.S. tariffs dollar for dollar and rate for rate.

The measures cover $27.6 billion of U.S. imports and include tariff rates of 15%, 25%, and 50%. Canada said the counter-tariffs will take effect September 8.

The manufacturing shift has several reported causes

Canadian manufacturers that moved production cited several reasons for their decisions. KPMG listed avoiding or reducing import tariffs, trade uncertainty, lower operating costs, tax conditions, and supply-chain integration among the leading factors.

Companies planning to move also identified conditions that could support investment in Canada. These included greater certainty around free trade, tariff relief, lower corporate taxes, cheaper energy, and access to skilled workers.

Automakers face additional uncertainty

The automotive sector remains an important part of the current trade dispute. Canadian vehicles and parts already face U.S. trade restrictions, and Trump announced on August 24 that tariffs on Canadian cars, trucks, and auto parts would rise to 50% beginning January 1, 2027.

Canada has continued to identify autos among the key sectors affected by U.S. trade measures. Canada’s ambassador to Washington, Mark Wiseman, said preserving a robust Canadian vehicle-assembly and parts industry is critical to any future trade agreement.

The internet is also talking about how Canada warns ineligible travelers they may be returned to the U.S.

The latest numbers show companies are reassessing their footprints

Trump’s August 30 appeal comes as Canadian manufacturers report active changes to production and investment plans. KPMG found that 42% had already moved some or all production to the United States or were planning or considering doing so.

At the same time, 80% of surveyed manufacturers planned to keep their headquarters in Canada. The data therefore points to a rebalancing of selected production and investment decisions rather than a wholesale relocation of Canadian companies.

In other news, a U.S. traveler was denied entry to Canada over an incident dating back 26 years, raising border concerns.

What do you think about Trump’s push for Canadian companies to move more business to the United States? Like this slideshow if you found the information useful, and comment with your take on the latest U.S.-Canada trade developments.

This slideshow was made with AI assistance and human editing.

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