Canadian Companies Hit with Tariffs: What’s Happening? 

The U.S. has imposed 25% tariffs on key Canadian exports, including aluminum and automotive products, along with new restrictions on aerospace parts and forestry goods: 

• Aluminum: Alcoa expects a $90 million hit in Q2 2025 due to U.S. tariffs on Canadian aluminum, which makes up about 70% of its production. 

• Automotive: Canadian auto exports now face a 25% tariff, impacting Ontario-based factories and threatening thousands of jobs. 

• Aerospace: Uncertainty over tariffs is delaying aircraft deliveries. Airbus, with assembly operations in Canada, faces possible 25% duties on planes headed to U.S. buyers. 

• Forestry: Canada’s softwood lumber exports are currently subject to 14.5% in combined duties, with U.S. investigations threatening further increases. 

Bank of Canada Governor Tiff Macklem called the situation a “once-in-a-century economic shock,” signaling the scale and urgency of the issue. 

How Are Canadian Companies Responding? 

Canadian businesses are pursuing several strategies: 

1. Diversifying Export Markets – Reducing overdependence on the U.S. and China by entering new markets, especially in Southeast Asia. 
2. Shifting Supply Chains – Relocating parts of manufacturing to ASEAN countries to take advantage of lower tariffs and regional FTAs. 
3. Building Local Partnerships – Forming joint ventures with ASEAN-based businesses to smooth market entry. 
4. Tapping Government Support – Export Development Canada (EDC) is seeing a spike in inquiries about trade credit insurance for companies shifting toward ASEAN markets. 

Why ASEAN Makes Sense 

ASEAN’s combined GDP is over $3.9 trillion, with a population exceeding 670 million. Its rapid economic development and middle-class expansion make it an ideal market for Canadian exports. 

Key Benefits: 

• Trade Agreements: Canada is negotiating a Canada-ASEAN Free Trade Agreement, projected to boost Canadian exports to the region by 13.3%. 

• Expanding Middle Class: ASEAN’s growing consumer base has rising demand for premium goods, clean technology, food products, and education. 

• Strategic Location: ASEAN acts as a launchpad to broader Asia-Pacific markets, including India and Australia. 

• Political Alignment: Democratic governance and openness to trade cooperation support stable business environments. 

Success Stories: Canadian Companies in ASEAN 

1. Manulife – Has deep roots in Vietnam, Indonesia, and the Philippines, meeting rising demand for financial services. 
2. McCain Foods – Successfully tailored products to ASEAN markets like Malaysia and the Philippines. 
3. Bombardier – Provided trains and metro systems in Thailand and Malaysia as part of infrastructure initiatives. 
4. Clearwater Seafoods – Found strong demand for premium seafood products in Singapore and broader Asia, illustrating ASEAN’s appetite for Canadian agri-products. 

Conclusion 

Tariffs have forced Canadian companies to reevaluate their trade strategies, but the shift is also opening doors. ASEAN isn’t just a short-term fix—it’s a region full of long-term potential, with growing consumer demand, a strategic location, and increasing openness to international trade. 

For companies looking to explore the region, the first step is to identify which ASEAN markets align with their strengths—whether it’s Vietnam’s manufacturing boom, Singapore’s appetite for innovation, or Indonesia’s expanding middle class. Government support is available too: Export Development Canada and the Trade Commissioner Service offer tools and connections that can ease the transition. 

Success in ASEAN will require thoughtful planning, local insight, and strong partnerships—but for Canadian businesses willing to make the leap, the payoff could be big. ASEAN may very well be the next chapter in Canada’s global trade story.