Outlining where Canadians will be feeling the effects of a trade war most acutely
Pattie Lovett-Reid is Chief Financial Commentator at HomeEquity Bank, she was previously Chief Financial Commentator at CTV news. Another version of this article appears on Life Makes Cents with Pattie Lovett-Reid.
Today is the day.
As of 12:01 this morning, Canada's new counter-tariffs on selected goods from the United States are in effect. Tariffs of 15, 25, and, in some cases, 50 per cent now apply to a targeted list of U.S.-origin imports covering approximately $27.6 billion in annual trade.
For Canadian households, and the advisors who serve them, the important word here is targeted.
This does not mean the price of everything went up this morning. It does not mean grocery bills will suddenly be 25 or 50 percent higher. And it certainly does not mean that every product carrying an American brand name is affected.
The tariffs apply to specific categories of goods that originate in the United States, that distinction matters.
What the tariff numbers actually mean
There are a few numbers worth understanding:
- September 8: The new counter-tariffs took effect at 12:01 a.m.
- $27.6 billion: The value of U.S. imports covered by the new measures.
- 15%, 25% or 50%: The tariff rate, depending on the particular product.
But another number provides useful context.
Bank of Canada researchers studying Canada's 2025 counter-tariffs found that roughly one-quarter of the 25 percent tariff ultimately showed up in retail prices. Prices of tariffed products rose about 6 percent relative to comparable products that were not tariffed, contributing roughly 0.3 percentage points to consumer-price inflation during that episode.
That does not mean we should assume the same result this time. The products, tariff rates, economic conditions and duration may be different.
But it illustrates an important principle: a 50 percent tariff on a particular imported product does not translate into a 50 percent increase in the overall cost of living.
For most households, the effects are more likely to be selective, uneven and gradual. Advisors can help them make sense of the likely effects.
Where might households notice the difference?
The new counter-tariffs are concentrated in sectors including dairy, appliances, agricultural equipment, pulp and paper, plastics, electronics, steel and aluminum.
For consumers, affected goods include certain:
- Dairy products, including cheese and concentrated milk products
- Refrigerators and freezers
- Washing machines and dryers
- Stoves and cooking appliances
- Smartphones
- Air-conditioning equipment
- Lawn mowers and other equipment
- Furniture
- Paper and sanitary-paper products
- Building-related products
The precise tariff depends on the individual product classification and its country of origin.
That last point is particularly important.
An American brand is not necessarily an American-made product. A product sold by a U.S. company may have been manufactured somewhere else. Conversely, a product sold under a non-American brand could have originated in the United States.
I would not advise clients to make purchasing decisions based on the brand name alone.
Don't expect every price to change today
It’s helpful to remind clients that tariffs begin at the border, not at the cash register.
The tariff is charged when affected goods are imported into Canada. What happens after that depends on the decisions businesses make.
Some retailers may still have inventory that entered Canada before the new tariffs applied. Goods already in transit to Canada when the measures came into force are also exempt from these new counter-tariffs.
Importers and retailers may absorb some of the additional cost. They may change suppliers. Manufacturers may alter where products are sourced or assembled. And where Canadian or non-U.S. alternatives are readily available, competition may constrain price increases.
Exchange rates will matter as well.
The result is that two seemingly similar products sitting beside one another on a store shelf may be affected very differently.
That is why I would not assume that every price increase over the coming months is tariff-related—or that every tariffed product will rise by the full tariff amount.
What should you tell clients to do today?
My advice is not to rush out and buy things simply because tariffs have arrived.
Instead, clients should stop, check and compare.
Before they make a significant purchase, clients may find it worthwhile to ask a few more questions than they might have asked six months ago.
Where was this particular product manufactured? Is it actually subject to the tariff? Is there a comparable Canadian product? Is there an alternative made somewhere other than the United States? Could the item they already own be repaired? Would used, refurbished or open-box make sense?
And perhaps most importantly:
Was I going to buy this anyway?
If a client’s refrigerator is working properly, tariffs are not a reason to replace it.
If they were already planning to buy an essential appliance, however, it makes sense to compare models, countries of origin, warranties and—most importantly—the final price they will actually pay.
I would be particularly cautious about buying something unnecessarily today simply to avoid a possible increase later.
Spending $1,000 now to avoid a hypothetical $100 increase makes little financial sense if someone did not need to spend the $1,000 in the first place.
Will consumers pay the entire tariff?
Not necessarily.
This is one of the most important distinctions to understand.
The tariff is imposed on the importer. Whether the full cost eventually reaches the consumer depends on inventory, competition, supply chains, exchange rates and how much of the increase manufacturers, distributors and retailers are prepared to absorb.
We have some useful Canadian evidence on this.
Bank of Canada researchers examining the 2025 counter-tariffs found that roughly one-quarter of the 25 percent tariff was reflected in retail prices.
They also found something encouraging. When most of those counter-tariffs were removed in September 2025, affected prices moved back relatively quickly toward comparable untariffed prices. For groceries and appliances, that reversal was nearly complete within about three months.
That does not guarantee the same outcome this time, but it is a useful reminder that tariff-related price increases are not necessarily permanent.
How can clients shop Canadian without being misled by the label?
This is an area where it pays to read the wording carefully.
For food products, the Canadian Food Inspection Agency distinguishes between several Canadian-content claims.
“Product of Canada” generally means that all or virtually all of the ingredients, processing and labour are Canadian. Under the guidelines, “all or virtually all” has generally been interpreted as more than 98 percent.
“Made in Canada” can be used when the last substantial transformation of the food occurred in Canada, even when some ingredients came from other countries. The claim must be accompanied by qualifying language indicating whether the product was made with imported ingredients or a combination of domestic and imported ingredients.
Claims such as “100% Canadian” have an even higher standard: the ingredients, processing and labour must be Canadian.
The larger point is that “Canadian” is not always a binary concept.
A food manufactured here using some imported ingredients still supports Canadian processing and employment. Buying from an independent Canadian retailer supports employment and economic activity here even if everything on its shelves was not made in Canada.
There are many ways for clients to direct more of their spending toward Canada without turning grocery shopping into an exercise in perfection.
What if the Canadian alternative costs more?
This is where some perspective is important.
Advisors can tell their clients to buy Canadian when it works for their households. But I would not advise anyone to compromise their financial stability to make a political or economic statement at the checkout.
If the Canadian option is competitive and fits a client’s budget, choosing it can support Canadian workers, farmers, manufacturers and businesses.
If it is substantially more expensive and their household budget is already under pressure, buy what they can reasonably afford.
There should be no financial guilt attached to purchasing necessities.
And remember that the choice is not necessarily Canada versus the United States.
Depending on the product, goods manufactured in Europe, Mexico, South Korea and elsewhere may provide alternatives that are not subject to these particular counter-tariffs.
Again, look beyond the brand name. Country of origin matters.
A practical household response
For advisors working with clients on how to respond to the tariffs, I would offer the following eight-point guide.
1. Protect the essentials first.
Housing, food, medication, utilities, transportation and insurance remain the priorities. Tariffs do not change the basic order of a sound household budget.
2. Postpone optional upgrades when appropriate.
If the phone, refrigerator or washing machine you own still works, extending its life may be more valuable now.
3. Repair before replacing.
Before assuming something needs to be replaced, get a repair estimate. A few hundred dollars spent extending the life of an appliance can be considerably less expensive than buying a new one.
4. Pay attention to country of origin.
Do not use the brand's nationality as a shortcut. What matters for these tariffs is where the particular product originates.
5. Compare unit prices.
For groceries, paper products and household supplies, compare the price per kilogram, litre, sheet or item rather than relying on package size or the sticker price.
6. Do not stockpile using debt.
This is particularly important. Paying 20 percent or more in credit-card interest to avoid a possible future tariff-related increase is not a saving.
7. Build a little more room into the budget.
If possible, redirecting even $10 or $20 a week from discretionary spending can create some capacity to absorb price increases as they appear.
8. Watch actual prices rather than headlines.
Keep receipts for regular purchases and pay attention to what you are actually spending. Not every price increase will be caused by tariffs, and not every tariffed product will become dramatically more expensive.
The bottom line
Today is tariff day. It is not doomsday.
There will be consequences. Some affected goods will become more expensive. Some price increases may appear relatively quickly; others may take weeks or months to work their way through inventories and supply chains. The impact will not be evenly distributed.
A household that needs to replace a refrigerator, washing machine or smartphone in the coming months may encounter the tariffs much more directly than a household making no major purchases.
But this is not a reason to panic or fundamentally rewrite a sensible financial plan, it is a reason to become a slightly more careful consumer.
Advisors can remind clients to compare before buying. Look at country of origin rather than simply the brand. Consider Canadian and non-U.S. alternatives. Repair when it makes economic sense. Postpone purchases that are genuinely optional. And above all, keep the household's financial priorities ahead of the politics of the moment.
Buying Canadian can be worthwhile for clients when it fits their budget. So can choosing an affordable product made somewhere else.
The goal isn't to make the perfect patriotic purchase every time, it is to help clients make thoughtful decisions with the money they have. On tariff day, that may be the most useful response of all.
For more information
For the most current information on Canada's counter-tariffs, including the complete list of U.S. products affected, tariff rates and effective dates, visit the Government of Canada's official tariff information.
The federal government's complete tariff list is the authoritative source for determining which U.S. products are subject to Canadian counter-tariffs.
