Preparing for U.S. tariffs: Canadian distributors on notice

The threat of US tariffs loom large over its North American trade partners, as do potential responses from Canada. And with US President Donald Trump indicating he will go through with applying 25% tariffs on all incoming goods from north of its border, the HVACR sector is compelled to plan ahead.

Recently, HRAI hosted a webinar with industry partners to discuss U.S. tariff motives, impacts, and responses. Much like how U.S. tariffs impacted the Canadian economy in 2016, it was agreed that a new round of tariffs will cause numerous challenges ranging from increased operational costs, supply chain disruptions, market volatility, and efficiency and productivity strain.

This opinion is shared by industry watchers such as Stephan Liozu, Chief Value Officer at Zilliant, who focuses on impacts to wholesalers and distributors in his article for Modern Distribution Management.“The potential tariffs in 2025 present significant challenges for distributors,” he writes. “By proactively diversifying supply chains, investing in technology and adopting flexible pricing strategies, distributors can better navigate the complexities of the evolving trade environment and maintain their competitive edge.”

It’s a different trade landscape now than it was seven years ago. Still, there are several strategies from previous trade challenges to navigate what comes next. Liozu’s MDM article outlines several ways distributors can refine their strategies to remain resilient in the months and years ahead. They include:

  • Working with procurement and supply chain teams to assess potential impacts and begin planning ahead. 
  • Managing cost-plus pricing to ensure margins are maintained while remaining competitive.
  • Pricing more dynamically, using real-time data to respond to market demands and cost changes as they happen. 
  • Embracing value-based pricing by working with customers to ensure they understand the value propositions of your products to help justify price increases. 
  • Maintaining transparent communication. “No one knows what the future holds,” writes Liozu. “It is now important to communicate with customers and not wait for January or February 2025. Clearly explain price changes to customers, highlighting the external factors influencing costs.”

Ultimately, Liozu says, “Disruption is coming. In this unpredictable trade environment, agility and dynamism in pricing are not just competitive advantages — they are necessities.”

Read the full MDM article, Brace Yourself: How the 2025 Tariffs Will Impact Distributors. For tariff updates and insights, watch HRAI's US Tariffs Policy and Canada’s Response webinar and look for news in future HRAI newsletters.

Back to Newsletters