What the new US tariffs mean for selling your business

After trade talks with the United States broke down in August 2026, a 50 percent US tariff took effect on $27.6 billion of Canadian goods, and Canada matched it from September 8. Buyers of an exposed business measure its US revenue and US inputs before setting a price. Risk that remains uncertain tends to move into earnouts and indemnities.

What happened in August

Trade talks between Canada and the United States broke down in August 2026. On August 22, Prime Minister Mark Carney said he had instructed Canada’s negotiators to return to Ottawa, because the American proposals asked too much and offered too little.

According to Finance Canada, the United States imposed a 50 percent tariff on $27.6 billion of Canadian goods, effective August 22. Ottawa announced matching counter tariffs on August 25, in force from September 8.

The Bank of Canada held its policy rate at 2.25 percent on September 2. Its statement said the new US tariffs and Canadian counter tariffs will raise costs for some businesses.

In the summary of its deliberations, published September 16, the Bank put the new US tariffs at roughly 5 percent of Canadian goods exports to the United States. The share is small across the economy. It falls heavily on the businesses whose products are on the lists.

The measures now in force

The table sets out the measures an owner is most likely to meet in a sale, drawn from Finance Canada and the Trade Commissioner Service. Each Canadian rate matches the US rate on the corresponding product.

Earlier Canadian counter tariffs, including those on autos, remain in place. Finance says the tariff remission framework stays open to requests for exceptional relief.

The federal support

On August 25, Ottawa announced $7.5 billion of new and enhanced measures for workers and businesses affected by the tariffs. The Finance backgrounder says this builds on nearly $25 billion of supports over the previous 18 months.

The piece aimed at small and medium businesses is a $1.5 billion top up to the Regional Tariff Response Initiative, delivered by the seven regional development agencies. Minister Rechie Valdez highlighted it on September 3.

The cap on contributions exempt from repayment rises from $1 million to $3 million, of which up to $2 million can cover demonstrated liquidity needs. The southern Ontario agency began taking applications on September 8 and puts the initiative at $3.45 billion nationally.

The Business Development Bank of Canada adds a $500 million liquidity stream to its Pivot to Grow program. Loans run from $250,000 to $5 million with interest only payments for 36 months. The minimum annual revenue to qualify drops to $1 million.

In a sale, this support becomes part of the file. A buyer will ask for each contribution or loan agreement and read what happens to it on a change of ownership. Grant income is one off, so buyers remove it from the adjusted earnings they apply a multiple to.

How a buyer reads tariff exposure

A buyer pays a multiple of the earnings it expects to keep. Where part of those earnings depends on trade across the border, the buyer measures that part before it agrees a number.

The law firm Borden Ladner Gervais (BLG), writing in April 2026, advised purchasers to review a target’s suppliers and customers for exposure to trade policy. It also pointed to the contract terms that allocate those costs. In general M&A practice, four questions carry most of the weight.

The first is the share of revenue sold into the United States, product by product, set against the tariff lists. A main line listed under Section 338 meets a 50 percent duty at the US border. Products off the lists carry a smaller risk. For a manufacturer that ships to the United States, buyers now raise this question early.

Inputs come next. Listed parts and materials bought from American suppliers now carry Canadian counter tariffs of up to 50 percent, and the buyer will want to know how much of the cost of goods sold that covers.

A buyer then tests pricing power. It looks for contracts with price adjustment clauses and for evidence that customers accepted earlier increases. Costs a business passes on leave its margin intact.

The last is origin. Goods that qualify under CUSMA remain exempt from some US measures, while Section 338 applies to them in full. A buyer will ask which measure each product falls under, and check the paperwork behind every CUSMA claim.

Where it shows up in the price and the terms

When a buyer can model the tariff cost, it deducts that cost from the earnings it expects and applies the multiple to the lower figure. That part of the exposure moves the price.

Exposure that remains uncertain tends to move into the terms, and BLG describes two tools that suit it. An earnout pays part of the price after closing if the business meets agreed targets, which lets both sides wait for post tariff results.

A trade impact indemnity, the second tool, compensates the buyer for losses caused by trade policy changes after closing. It shifts part of that risk back to the seller.

For a seller, the earnout measure decides the outcome. Revenue is harder for a buyer to move than profit, and the agreement can state how duties count in the calculation.

The purchase agreement also decides who bears a trade policy change between signing and closing. BLG notes that the parties choose whether such a change falls within the material adverse change clause, and some deals split the risk.

Working capital is the other place tariffs appear. An owner who stocked up ahead of September 8 carries more inventory than usual. Listed US goods bought after that date carry the duty in their cost.

The working capital target is usually the average of the last twelve months, and a year of tariff swings moves that average. A seller wants the target set at the normal level for the business, with the tariff months identified in the calculation.

What diligence will ask

The due diligence requests follow the four questions. Expect a schedule of revenue by customer and by country, reconciled to the financial statements. The buyer will also want the main products listed with their tariff classification codes.

A buyer will ask for the duties the business has paid, month by month, and for any remission requests with the decisions on them. It will read the customer and supplier contracts that say who pays a new duty.

For goods shipped under CUSMA, the buyer will ask for the certifications of origin. Under the agreement, an exporter or producer that completes one keeps the supporting records for five years from the date it was completed.

The Canada Border Services Agency says one certification can cover shipments of identical goods over a period of up to 12 months. A buyer will match each period to the shipments it covers.

Documents to prepare before a buyer asks

An owner can assemble this file before going to market. It shortens diligence and gives the buyer figures to price from.

• Prepare a revenue schedule by customer and country for the last three years and the current year to date, tied to the financial statements.
• The main products belong on one page, with their tariff classification codes and the US and Canadian measures that apply to each.
• Keep every CUSMA certification of origin together with the invoices and production records behind it.
• An accountant can show earnings before and after tariffs once the duties the business has paid sit on their own cost line.
• If the business passed costs on, a record of each price increase and the customers who accepted it is the best evidence of pricing power.
• Any tariff support agreement, from a regional development agency or the BDC, goes in the file with its terms on a change of ownership.

A buyer who finds the exposure mapped in advance can price it directly. When the buyer has to map it alone, the uncertainty tends to move into holdbacks and earnouts. A free Quick AI valuation shows where a business stands before that conversation begins.

Questions owners ask

How do tariffs affect the price of my business?

A buyer pays a multiple of the earnings it expects to keep. When it can model the tariff cost, it deducts that cost from expected earnings before applying the multiple. When the effect is still uncertain, the buyer tends to move part of the price into an earnout or ask for a trade impact indemnity.

Does CUSMA protect my exports from the new US tariffs?

CUSMA protects some exports and leaves others exposed. Goods that qualify under CUSMA remain exempt from some US measures, including the Section 232 tariff on the US content of compliant vehicles. The Trade Commissioner Service says the Section 338 tariffs apply to CUSMA qualifying goods in full, so a buyer will check each product against each measure.

What is the Regional Tariff Response Initiative?

It is a federal program, delivered by the seven regional development agencies, that helps small and medium businesses affected by tariffs. Ottawa added $1.5 billion in August 2026, which brings it to $3.45 billion nationally. The cap on contributions exempt from repayment rose to $3 million, of which up to $2 million can cover liquidity needs.