With an August 19 tariff deadline bearing down, many Canadian exporters are making a striking choice: they are not flooding trucks and warehouses with goods bound for the United States. Instead, they are waiting.
President Donald Trump’s administration has announced 50% tariffs covering nearly US$20 billion of Canadian imports, including products that would otherwise qualify for tariff-free treatment under CUSMA. Yet customs brokers are reporting far less of the frantic front-loading that accompanied previous tariff deadlines. Part of the calculation is financial. Shipping early is expensive and disruptive. But another part is political: companies have watched Trump threaten severe trade measures before, only for deadlines to move or penalties to be softened. With Ottawa and Washington still negotiating intensively, some exporters are effectively wagering that another retreat or compromise will arrive before the tariffs do.
Why Exporters Are Waiting Instead of Racing the Clock
The clearest indication of the change in mood comes from the people handling goods at the border. Janine Harker, who heads the Canadian Society of Customs Brokers, told The Canadian Press that businesses have largely avoided a rush to front-load shipments before August 19. She described the atmosphere as one of “watchful waiting.” That represents a notable change from earlier stages of the trade conflict, when companies tried to get merchandise across the border before threatened duties could take effect.
There is a practical logic behind the restraint. Moving September or October orders into August can protect merchandise from a tariff only if the tariff actually arrives as scheduled and the goods can realistically be shipped, stored and sold early. Otherwise, businesses may simply tie up cash and fill warehouses unnecessarily. The threatened 50% rate is severe enough to justify contingency planning, but repeated tariff threats have made firms more reluctant to reorganize their entire supply chains around every deadline. For some exporters, waiting several more days now appears less risky than betting heavily on a deadline that could still move.
The ‘TACO’ Pattern Has Changed How Businesses Read Tariff Threats
Wall Street coined an unflattering shorthand during Trump’s earlier tariff battles: the “TACO trade,” or the idea that Trump would threaten exceptionally high tariffs and then retreat when markets, businesses or trading partners pushed back. The expression gained traction after the administration’s sweeping April 2025 tariff announcement. Rates ranging as high as 50% were announced for numerous countries, but many were quickly reduced to a temporary 10% baseline while negotiations continued. Other deadlines were later postponed as well.
Canadian exporters cannot assume the same script will repeat. Trump has also allowed major tariffs to take effect, including measures that inflicted significant damage on Canadian metals shipments. Still, previous reversals have changed the psychology surrounding tariff deadlines. A deadline that once might have triggered an immediate scramble now carries another possibility: waiting could save a company from expensive logistical decisions if Washington ultimately delays, narrows or renegotiates the measure. That calculation helps explain why the current response can look surprisingly calm even when the headline tariff rate is 50%.
The New Tariff List Reaches Far Beyond the Usual Trade Flashpoints
The threatened duties are significant partly because of how broadly they reach. Washington says the new 50% tariffs will cover nearly US$20 billion worth of Canadian imports, equivalent to roughly 5.2% of all U.S. goods imports from Canada in 2025. Products identified by the administration and subsequent reporting include wine, dairy products, hockey sticks, cement, furniture, swimming pools, fishing rods, seeds, clothing and other consumer and industrial goods. Energy, potash and certain fish and critical minerals are among the exemptions, while products already subject to separate Section 232 tariffs are treated separately.
The legal mechanism is also unusual. Trump invoked Section 338 of the Tariff Act of 1930, a provision allowing additional duties of up to 50% when the United States determines another country is discriminating against American commerce. Reuters reported that the proclamations represented the first known presidential use of the provision in nearly a century. More importantly for exporters, Washington has said the new duties apply regardless of whether affected goods satisfy CUSMA rules. That strips away a protection many Canadian companies had relied upon during previous rounds of tariffs.
Front-Loading Worked Before — But It Comes With a Price
Canadian companies have already demonstrated how dramatically they can change shipping patterns when a tariff looks unavoidable. In the first quarter of 2025, Canadian goods exports jumped roughly 10% from the previous quarter as companies rushed shipments into the United States before new tariffs took effect. Machinery, equipment and motor vehicles led the increase, while exporters of lumber, food and pharmaceutical products also accelerated shipments. Federal Reserve researchers documented similar front-loading across numerous U.S. trading partners during the same period.
Repeating that strategy indefinitely is much harder. Shipping goods weeks early can move customs clearance ahead of a tariff date, but it also pulls future sales into the present. Importers need somewhere to store the inventory, suppliers may need earlier payment, production schedules can be distorted and the benefit disappears if Washington postpones the tariff anyway. That makes the muted August response particularly revealing. Exporters know front-loading can work; many simply appear unconvinced that doing it again is worth the cost. After more than a year of unpredictable trade announcements, tariff fatigue has itself become part of the business calculation.
Small Exporters Have the Least Room for a Wrong Bet
For smaller Canadian businesses, the decision carries much more than theoretical risk. The Canadian Federation of Independent Business polled 1,833 independent business owners between July 28 and August 6. Among exporters exposed to the proposed tariffs, 77% expected revenue losses and 35% anticipated losing at least half their revenue. Nearly eight in 10 said a 50% tariff would make their products uncompetitive in the American market.
Yet the same research found 78% of respondents remained in wait-and-see mode. That apparent contradiction captures the predicament facing smaller exporters. A business may believe a tariff could devastate its U.S. sales while simultaneously lacking the financial flexibility to rush months of merchandise across the border. CFIB also found 75% of affected businesses would look to reduce their dependence on the United States if the tariff takes effect. For a small manufacturer or specialty food exporter built around American customers, however, finding equivalent buyers elsewhere is rarely something that happens between one tariff announcement and the next.
Why the Bet on a Last-Minute Deal Is Not Pure Hope
There is another reason companies are reluctant to treat August 19 as inevitable: Ottawa and Washington are still talking. As of August 13, Reuters reported that Canada-U.S. negotiations were progressing, according to a Canadian government source, and that Washington also wanted to reach an agreement before the tariff deadline. Canada-U.S. Trade Minister Dominic LeBlanc met U.S. Trade Representative Jamieson Greer for the second time that week and the fourth time in roughly three weeks.
Canada’s chief trade negotiator, Michael Charette, has also been engaging regularly with U.S. counterparts alongside senior Canadian officials from departments including finance, foreign affairs and agriculture. None of that guarantees a breakthrough, and confidential negotiations frequently look more promising from the outside than they ultimately prove to be. But exporters watching those meetings have a tangible reason to hesitate before paying to accelerate shipments. If both governments still see value in an agreement before August 19, every additional negotiating session increases the possibility that the final tariff regime could look different from the one currently scheduled.
A Deal Could Require Politically Difficult Concessions
The challenge is that narrowing the tariff fight may require compromises extending well beyond the products facing the new 50% duties. Reuters has reported that negotiators have discussed potential Canadian moves involving tariffs on U.S.-made vehicles, American complaints about the administration of dairy import quotas and the return of U.S. alcohol to provincial liquor-store shelves. In exchange, Washington could potentially reduce some of its existing tariffs on Canadian steel and aluminum. Those were negotiating possibilities rather than an agreed package.
Each issue creates domestic political complications. Dairy farmers and processors have warned Ottawa against making additional concessions affecting Canada’s supply-management system. Alcohol is complicated because provincial governments control much of the purchasing and distribution system, limiting Ottawa’s ability to promise an immediate return of American products on its own. Auto concessions would also land amid a much wider dispute over North American vehicle production. For exporters hoping Trump blinks, that complexity cuts both ways: there are enough issues available to construct a compromise, but also enough political pressure points to prevent one.
If the Gamble Fails, the Shock Could Arrive Quickly
If there is no postponement or agreement, the new tariffs are scheduled to apply to covered goods entered into the United States beginning at 12:01 a.m. Eastern Time on August 19. Technically, the tariff is collected from the U.S. importer rather than directly from the Canadian exporter. Economically, however, exporters can still absorb much of the pain as American customers demand lower prices, cancel orders, switch suppliers or pass higher costs along to consumers.
Canada has already seen what a 50% tariff can do to trade volumes. The Bank of Canada reported that Canadian steel exports to the United States fell by roughly half after a separate 50% U.S. steel tariff took effect. Aluminum shipments also fell sharply before partially recovering as U.S. inventories tightened. There is another reason the August threat matters: the Bank of Canada’s July economic projection assumed CUSMA-compliant Canadian goods would continue to receive tariff exemptions. The Section 338 measures were announced afterward. If they take effect in full, they would therefore introduce a new trade shock beyond an important assumption underlying that outlook.
Even a Deal Would Not Bring Back the Old Certainty
Whatever happens on August 19, the deeper Canada-U.S. trade relationship has already entered a more uncertain phase. On July 1, the United States declined to renew CUSMA in its current form during the agreement’s formal review process. That decision did not terminate the pact: CUSMA remains in force, and without a new extension the three countries move into annual reviews while the existing agreement can continue until 2036. The North American relationship still encompasses roughly US$1.6 trillion in annual trade, making a wholesale economic separation extraordinarily difficult.
But exporters are increasingly being asked to plan around political risk that did not exist at the same level when CUSMA took effect in 2020. CFIB’s finding that three-quarters of businesses exposed to the new tariff would try to reduce their U.S. dependence points toward the longer-term response. Waiting for Trump to blink may prove sensible over a five-day deadline. Building an export strategy around the assumption that Washington will always blink would be far more dangerous. Even another last-minute deal would leave Canadian businesses with a powerful incentive to find more customers, more markets and more ways to withstand the next deadline.
