Tariffs have moved from background noise to front-page news in recent years. For a financial advisor in Canada, that shift is not just political drama. Tariffs influence what your clients pay for everyday goods and how competitive Canadian companies are. They also impact where investment opportunities sit on the risk spectrum.
In this article, Wealth Professional will explore what tariffs are and how global and local measures can affect your practice and your clients' portfolios. We've also rounded up the latest news stories on tariffs at the bottom of this article, so be sure to check them out!
A tariff is a tax charged on goods that cross a border into a country. When a shipment arrives, the customs authority in that country collects the tariff before the goods can enter circulation.
Governments use tariffs to tilt the playing field toward domestic producers. Foreign products become more expensive compared with locally produced alternatives by adding a tax to imports. The idea is to make homegrown goods more attractive in the market.
One survey suggests that clients are increasingly turning to financial advisors for guidance as recent tariff measures disrupt the markets and investor sentiment.
The legal responsibility falls on the importer. In practice, the cost rarely stops there. Importers often pass some of the tariff costs along to buyers through higher prices. At the same time, importers and their suppliers can absorb part of the hit through lower profit margins.
For your clients, this can show up in several ways:
Those factors weigh on economic activity and can influence inflation, employment, and growth.
Tariffs do not just apply to finished products that households buy. They also apply to intermediate goods, the components that manufacturers use to build other items.
Consider a vehicle. Tariffs can show up at multiple points. For example, a tariff on steel or aluminum increases the cost of making parts such as batteries, mufflers, or transmissions.
Vehicle parts often cross borders several times during the production process, so the same component can attract tariffs more than once. The finished vehicle can face another tariff when it moves across the border as a completed product.
Each time, costs rise for producers. Often, those higher costs filter through to the final buyer in the form of higher prices. This is critical for your clients both as consumers and investors holding positions in companies that rely on complex supply chains.
When people talk about tariffs today, they are usually focused on US measures that affect Canadian exports, rather than tariffs that Canada itself imposes. The United States has taken steps under different laws, and those moves have not all worked the same way.
The most durable measures are sector-specific tariffs justified on national security grounds. These were imposed using Section 232 of the US Trade Expansion Act. They target industries rather than countries. This means that the recent legal challenges to other Trump tariffs have not removed them.
For Canadian exports, current Section 232 tariffs include:
These measures fall heavily on sectors that are tightly integrated with US supply chains. For example, auto and auto parts makers that ship vehicles or components across the border face substantial extra costs. Producers of steel, aluminum, lumber, and some copper products see similar pressures.
Tariffs do not sit in isolation. They interact with supply chains, exchange rates, company behaviour, and investor sentiment. For Canadian markets, the Trump tariff regime has worked through several channels that matter for your clients' portfolios:
Industry data show that Canadian exports in categories covered by Section 232 tariffs dropped by about $15.6 billion through 2025. Other exports fell by a similar dollar amount over that period, although that figure is clouded by price swings in oil and gold.
Once those commodities and Section 232 products are stripped out, exports to the United States are down a more modest $3.7 billion. This is around 1.4 percent year over year.
That pattern tells you two things. First, tariffs aimed at autos, metals, lumber, and copper have a huge impact on those sectors. Second, the wider export base has proven more resilient, helped by Canada–United States–Mexico Agreement (CUSMA) exemptions and adjustments by companies.
For a financial advisor, this points to higher ongoing risk in:
These industries face direct cost increases and potential volume losses. They can also see compressed margins if they choose to absorb part of the tariffs to stay competitive.
On February 2026, the US Supreme Court ruling struck down Trump's use of the International Emergency Economic Powers Act (IEEPA) for broad reciprocal tariffs. That included "fentanyl tariffs" of 25 percent and then 35 percent on many Canadian goods.
In response, Trump introduced the 10 percent global tariff under Section 122. Although most CUSMA-compliant exports are exempt, the move underlined how quickly the tariff setting can change.
For markets, that can trigger short-term volatility, even if the economic effect is smaller than headlines suggest. From an investment standpoint, it is helpful to separate two things:
Financial markets tend to react quickly to surprise headlines, then settle as details become clearer. Over the past year, the S&P/TSX Composite Index has reached record levels despite repeated tariff escalations.
This tells you that investors have been pricing in these risks over time rather than all at once. Watch this video to learn more:
Find out how financial advisors and investors can manage unrelenting uncertainty on tariffs when you read this linked article!
Headlines about a 35 percent tariff can understandably confuse your clients. In turn, it is critical to distinguish between tariffs that the United States applies to Canadian goods and tariffs that Canada itself charges.
The 35 percent rate most often refers to an earlier US decision to increase duties on Canadian exports. Trump lifted a previous 25 percent tariff to 35 percent through an executive order tied to concerns about fentanyl and other illicit drugs entering the United States from Canada.
Goods that were qualified for CUSMA treatment were exempt. This means that roughly 95 percent of Canadian exports to the United States did not actually face this 35 percent rate.
That IEEPA-based regime is no longer in force after the US Supreme Court ruling in February 2026. In its place, Trump introduced the 10 percent global tariff under Section 122. Again, this has exemptions for CUSMA-compliant goods and products already covered by Section 232 on sectoral tariffs.
So, when your clients ask whether Canada has a 35 percent tariff, you can tell them this: President Trump previously set a 35 percent tariff on certain Canadian exports. This was applied only to a small slice of trade and has since been removed by the US Supreme Court.
Tariffs are likely to remain part of the environment that financial advisors must consider when building and reviewing portfolios. They influence input costs, export volumes, and investor sentiment, especially in sectors tied closely to US supply chains.
As a financial advisor, you can help your clients recognize where tariff exposure is highest, particularly in autos, steel, aluminum, lumber, and some copper products. You should also treat new tariff announcements and threats as sources of short-term volatility, not automatic reasons to abandon long-term strategies.
Those who follow financial news closely might feel worried each time they see another story about Trump tariffs or CUSMA disputes. Connect those headlines back to how companies earn revenue and manage costs over time. Help investors understand where trade policy genuinely changes the investment thesis for a sector or a specific holding.
Tariffs can affect your clients' portfolios, but they do not erase the value of careful security selection and patience. When you can explain how these policies work and which parts of the Canadian market are most exposed, you help your clients stay focused on the long term. This keeps them from reacting to every new development in the trade file.
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