A new survey indicates that trade tensions are causing some Canadian manufacturers to decide whether to relocate production south of the border or delay capital investments.
KPMG Canada said on Tuesday, 7 July ’26, that 42% of Canadian manufacturing enterprises indicated that they have or are considering relocating production to the U.S. Of those considering relocation, 77% expect to initiate the transition within the next 2 years.
Partner and national leader of industrial markets at KPMG Canada, Anamika Gadia, said that domestic manufacturers have shown resilience over the last year, although resilience certainly has its limits.
Gadia said in an interview that KPMG’s survey clearly reflects that while enterprises have been making short-term decisions to adapt to tariffs & trade uncertainty, they’re currently moving towards making longer-term investment decisions.
Gadia went on to add that in other words, they aren’t waiting to see the outcome of the trade negotiations. This includes CUSMA discussions while they move to make longer-term investment decisions. These investment decisions involve relocating their production to the U.S.
Results for the survey were taken from business owners and executives besides decision-makers at 275 Canadian manufacturing enterprises between Monday, 11, and Friday, 29 May ’26. This goal was achieved by using Angus Reid’s business research panel.
A week before last, U.S. Trade Representative Jamieson Greer said that the U.S. isn’t renewing the Canada-U.S.-Mexico (CUSMA) agreement in its current form. However, the trade agreement was to remain in place as negotiations continue.
This decision triggers a rolling annual review for up to a decade. At that point, it may expire if an extension isn’t agreed upon. CUSMA remains in place unless one of the partner countries gives 6 months’ notice that it’s pulling out.
The trade agreement has shielded Canada from many of U.S. President Donald Trump’s tariffs. However, Canada is being affected by separate sectorial tariffs on industries like steel, aluminum, and automobiles, besides cabinetry.
