Canadian Businesses Reshore Production to Avoid U.S. Tariffs

Canadian businesses are reshoring production and sourcing ingredients domestically to avoid the financial impact of an ongoing trade war and tariffs imposed by the United States. The shift comes as companies seek to insulate themselves from rising costs associated with cross-border trade.

The Unscented Company, a Montreal-based body care business, moved its soap production from Vermont to Canada. The company determined that continuing U.S. production would cost it $150,000 in tariffs by the end of 2026. Founder and CEO Anie Rouleau stated that the situation is "significant enough to have a plan" and that the company is now executing that strategy.

Similarly, Chapman's Ice Cream is converting more than 70 percent of its ingredients from U.S. sources to Canadian or other international suppliers. Chief Operating Officer Ashley Chapman reported that the company has partnered with other Canadian firms to reshore items never previously produced in Canada. While Chapman's has absorbed immediate cost increases, it expects to maintain current consumer prices until March 2028.

Industry experts note that while domesticating supply chains builds long-term internal capability, the process remains expensive and complex. This difficulty stems from the deep integration of North American supply chains established under NAFTA and CUSMA.