Canadian manufacturers are showing resilience in the face of prolonged trade tensions. According to a recent survey conducted by KPMG in Canada, more than half of domestic manufacturers believe they can withstand a trade war with the U.S. lasting over a year, a testament to their adaptability and resourcefulness.
Building Resilience Amid Trade Uncertainty
The survey reveals that 54% of Canadian manufacturers are confident in their ability to endure a long-term tariff battle. This sense of preparedness stands in contrast to the broader business landscape, where 67% of companies across various industries report similar optimism.
A key takeaway from the report is the growing recognition among manufacturing leaders that Canada must reduce its reliance on U.S. markets. In fact, 86% of respondents expressed that diversifying trade relationships and expanding into new markets is crucial for long-term stability.
Strengthening Domestic Trade
One strategy manufacturers are eager to pursue is expanding their client base within Canada. More than three-quarters (76%) of those surveyed emphasized the importance of removing interprovincial trade barriers, which they see as critical to their survival and growth. This sentiment is echoed by the general public, with 96% of Canadians supporting the elimination of these barriers to increase access to Canadian-made products and enhance consumer choice.
“The industry proved during COVID-19 that it can handle adversity and pivot effectively,” said Alison Glober, a management consulting partner and KPMG in Canada’s national manufacturing sector leader. “They will need the same resolve today while exploring all options, including expanding into new global markets, shifting production where necessary, conducting strategic operational reviews, reducing costs, and enhancing efficiency and productivity.”
The Path Forward
Canadian manufacturers demonstrated remarkable agility during the pandemic, swiftly adapting to supply chain disruptions and shifting market demands. Now, as they navigate ongoing trade challenges, they are once again called upon to innovate and strengthen their competitive edge.
The survey, conducted between February 13 and February 28, polled 602 Canadian business leaders, including 154 CEOs from the manufacturing sector. The findings highlight both the challenges and opportunities that lie ahead as the industry seeks to bolster its resilience, diversify markets, and capitalize on domestic and international growth.
Conclusion
In a time of economic uncertainty, Canadian manufacturers are determined to weather the storm by focusing on diversification, operational efficiency, and expanded domestic trade. By leveraging the lessons learned during past disruptions, the sector is positioning itself for long-term success, even in the face of extended trade tensions.
