Over the past week, President Donald Trump has publicly sent letters to countries around the globe informing them of the tariffs they can expect to see implemented Aug. 1, with various rationales given for each country.

On Thursday evening, Canada officially received notice that Trump was unhappy with the country’s actions since he originally declared 25% tariffs on Canadian imports back in March.

  • As a result, he says that the U.S. will increase tariffs on Canadian imports to 35%.
  • Trump’s stated reasoning is twofold: his claim that Canada is allowing fentanyl to enter the U.S. as well as his displeasure with the 25% retaliatory tariffs that Ottawa imposed on U.S. imports in March.


Both sides had stated a goal of reaching a trade agreement by July 21, but Trump appeared to halt negotiations with Canada on June 27 due to the country’s digital service tax, ending any doubt that the two sides were still engaged in a trade war.

Canada’s Prime Minister, Mark Carney, addressed the announcement on social media, claiming, “Canada has made vital progress to stop the scourge of fentanyl in North America.”


The 35% tariffs on Canadian imports are separate from additional levies the administration has applied, including 50% tariffs on steel and aluminum imports, 25% tariffs on certain automobile parts and 50% on copper, all also starting Aug. 1. If applicable these will be levied and combined with the 35% tariff on Canadian imports.


Promo Perspective

These tariffs represent a point of frustration for North American businesses hoping for some trade stability in the near future. The development is likely to increase supply chain headaches for promo firms doing business across the border.

In March, Aaron Moscoe, CEO of Canadian-based distributor TPS Promotions & Incentives, said Canadians were rallying around the conflict to support local business.

“The mere threat of tariffs and suggestion that Canada become a 51st state has created a sense of national pride and a strong ‘Buy Canadian’ sentiment as Canadians seek to support each other,” Moscoe told PPAI Media.

RELATED: ‘Tremendous Spirit:’ Canadian Promo Pros Seeing National Pride Amid US Tariffs

Still, the increased tariffs in addition to other possible applicable tariffs are likely to have an impact on the Canadian economy, and in turn, may well have negative effects on the marketing budget for Canadian brands and businesses. Similar dynamics are possible for the American economy during a trade war.

“Our only option is to continue evaluating options that come from ‘anywhere but America,'” Jen Beldam, founder and owner of distributor Northern Branding Studio in Picton, Ontario, said in March. “That’s become a popular slogan up here amongst consumers. We’re keeping our goods from crossing borders as much as possible, including TBD line items on sales orders, and just waiting to see where the chips fall.”

RELATED: Trump Sets New Tariff Rates To Take Effect August 1

Tariffs Are Determined By Country Of Origin

A tariff applies to an import based on the country that the goods were made in or originated from. The reason for the tariff is typically to have some sort of negative impact on that country of origin in trade wars or negotiations.

  • At a time when the U.S. is applying tariffs to a potentially unprecedented number of countries, it’s important that distributors have conversations with their supplier partners to achieve clarity and avoid assumptions.
  • For example, in the case of Montreal-based Spector & Co., PPAI 100’s No. 25 supplier, a significant amount of the products is sourced from China, which is a different tariff conversation than the one involving Canadian tariffs.
  • There is “a very small subsection” of Spector products manufactured in Canada, and there is also a small duty placed on Canadian labor that the company is able to absorb.


“There’s no difference between dealing with us versus dealing with anyone in the U.S.,” Marla Ruttenberg, Spector’s chief financial officer, said in March, as a message to distributors needing to bring product to the U.S.

Marla Ruttenberg headshot
There’s no difference between dealing with us versus dealing with anyone in the U.S.”

Marla Ruttenberg

Spector & Co., Chief Financial Officer

To clarify further, Spector is still paying tariffs on their Chinese imports before bringing them into the U.S. With so much of promo (and most industries) reliant on China, this is an issue faced by many U.S. suppliers as well. There is no second set of tariffs applied to Spector for getting the products over the U.S. border.

“It’s going into the U.S. as duty paid,” says Ruttenberg. “We’re paying the duty when they come in, not when they go out.”

  • This is also the case with imports for companies based in Mexico or any other country. It is a crucial point of understanding that a company being based in a certain country does not guarantee that its products are also manufactured in that country.


This has been a point of emphasis also made by PPAI Board Chair Denise Taschereau, CEO and co-founder of Vancouver-based distributor Fairware, who warns against knee-jerk reactions, particularly of members abandoning companies that operate in Mexico and Canada.

Traditionally, tariffs are anchored in country of origin, so your partners in Mexico or Canada who are decorating goods from overseas shouldn’t be impacted.”

Denise Taschereau

CEO, Fairware & PPAI Board Chair

“It’s critical to understand the impacts,” Taschereau says. “Traditionally, tariffs are anchored in country of origin, so your partners in Canada who are decorating goods from overseas shouldn’t be further impacted. We want to continue to support those brands and uplift them at a time like this.”