This article was developed in collaboration with Fraser Matte, a Senior Associate at xNorth and an experienced interim supply chain executive with three decades of experience in manufacturing and supply chain leadership. Having held senior leadership roles in complex industrial environments, Fraser brings deep expertise in supply chain planning, operational transformation, disruption management and performance improvement.
Running a business through a trade war is a planning problem, not a news problem.
On August 22, the United States imposed additional 50% tariffs on nearly US$20 billion — approximately C$27.6 billion — of Canadian goods. The measure applies to affected products, including goods that are CUSMA-compliant, and carries no announced expiry date. Canada has now published dollar-for-dollar countermeasures on C$27.6 billion of US imports, effective September 8. Trade negotiations between the two governments have been suspended.
The Canadian list runs to more than 700 products at rates of 15%, 25% and 50%, with the rate on each product matching the corresponding US rate. The concentration is in steel and aluminum, dairy, appliances, agricultural equipment, pulp and paper, plastics and electronics.
Behind the headlines sits a structural change most companies have not absorbed. CUSMA remains fully in force through July 1, 2036 — nothing has expired, and preferential access continues to operate. But at the 2026 joint review the parties did not agree to extend the agreement for a further sixteen-year term. The consequence is an annual review cycle, every year, unless and until they do.
If you run a manufacturing business with cross-border exposure, your questions have now become more specific. Which SKUs, suppliers and lanes are exposed? Whether the measures will hold, expand or be carved back. Whether competitors will absorb the cost or pass it through. And whether CUSMA compliance provides sufficient protection — it did not protect affected goods from this measure.
The first of those you can answer this week. The rest you will not forecast precisely. And you do not need to.
Nobody outside the negotiating room will. Two governments are making decisions in real time under political pressure, and the output is not forecastable with the precision planners are accustomed to demanding of themselves.
This is the oldest fallacy in our profession, wearing a new costume.
The demand fallacy is the belief that if we can forecast one number accurately enough, every downstream decision will fall into place. In volatile conditions a single-number forecast creates false confidence. The operating plan has to be built around a range of outcomes instead.
For thirty years I have watched companies chase forecast accuracy as though it were the binding constraint. It was never true for demand. It is certainly not true for trade policy.
The forecast is not the lever. The plan is.
And the plan operates on three horizons.
The next 90 days: absorb
Where the buffer sits. Inventory positioned on the right side of the border is a decision you can make this week, ahead of the September 8 effective date.
How fast you can re-cost. The list is published. How long until you know landed cost by SKU and by lane under the new rates? If the answer is measured in weeks rather than days, you are making September decisions on August numbers.
Which decisions are pre-made. Do not wait for the measures to take effect to start debating whether you would reroute, resource, or absorb. Set the trigger now. Name the owner now. The test for what reaches the executive table is not size — it is reversibility and reach. Anything that commits capital, crosses functions, or cannot be walked back belongs upstairs. Everything else should be settled below it. The worst possible time to establish decision rights is in the middle of the disruption.
Demand planning goes policy-contingent. A single-point forecast has stopped earning its keep. What you need is two or three demand pictures — the measures hold, or they are carved back; competitors pass cost through, or they absorb it — each with the response already decided. You are not predicting the outcome. You are removing the lag between the outcome arriving and your response starting.
The next 12 months: re-cost and requalify
Most of the parameters in your planning system were configured for a tariff-free border. Lead times, sourcing lanes, cost tables, safety stock, Incoterms, who carries duty risk. That assumption can no longer be taken for granted, and every planning parameter built on it now needs to be revalidated.
Re-costing is not a spreadsheet exercise. It changes which SKUs still earn their place in the lineup, which customers still earn their service level, and where the real margin sits. Companies that skip it tend to discover the answer three quarters late, in a margin variance nobody can explain.
Then the slower work: qualifying alternate suppliers, revisiting Incoterms and duty responsibility, renegotiating contracts written when the border was open. Supplier qualification runs six to eighteen months in regulated categories. If you start only when the tariff bites, you are already late.
This horizon is also where trade-offs have to be priced rather than argued. Absorb the cost or pass it through. Protect the customer or protect the margin. Hold inventory on which side of the border. These decisions sit between two P&Ls, which means no single function can resolve them — and Finance needs to be in the room while there are still three versions of the plan, not after one has been chosen.
The next five years: treat it as structural
This is where I see the most expensive mistake. Companies are managing a disruption they expect to wait out.
The annual CUSMA review cycle argues otherwise. The terms of North American trade are now revisited every year through 2036. That makes the border a standing variable in your cost structure rather than a constant you can plan around.
That is a footprint question, not a planning question. Where capacity sits. How much revenue depends on one border staying open on favourable terms. Whether the growth plan assumes a market that is now priced differently than it was in January.
Two things that break under pressure
Cadence. A monthly data refresh means everyone discovers the same problem at the same moment — in the meeting, with no runway left to coordinate a response. That was survivable in a stable market. What you need now is standing visibility on landed cost, exposure and coverage, plus event triggers that fire when policy moves, so coordination happens before the meeting rather than in it.
Honesty. Good planning asks people to be wrong out loud, on a schedule, in front of their peers. Where that is punished, people protect themselves: sandbagged forecasts, padded lead times, the real number kept in a private file. You cannot manage exposure you cannot see. The organizations that come through this well will be the ones where being wrong early is safer than being wrong late.
The gap between knowing and doing
Most executives reading this already agree with the argument. That has never been the hard part.
The challenge is rarely knowing that the network must change. It is creating the leadership capacity to re-cost exposure, establish decision rights, qualify alternatives and execute the response while the business keeps running. The people who would lead that work are already running the day job, and a permanent hire takes months the situation does not allow. Experienced interim supply-chain leadership can close that gap quickly, without waiting for a search to conclude.
Short term, you buffer. Medium term, you re-cost. Long term, you redesign.
The border will keep moving. Build the operating plan that holds up even when the number does not.
About xNorth
xNorth helps owners, boards, and CEOs navigate transformation and critical leadership transitions. The firm provides executive interim management and fractional leadership, supported by high-end consulting, advisory, and accelerated search.
Based in Canada and serving clients across North America, xNorth is the Canadian partner of the Valtus Alliance™, an international executive interim management network operating across more than 30 countries. The alliance provides access to more than 60,000 executives and completes more than 1,000 assignments annually.
