Canadian Retailers Keep Shifting From U.S. Brands Amid Tariffs

Faire's day-60 tariff data shows Canadian retailers moving orders off U.S. brands. Here's how U.S. wholesalers can price, invoice and keep Canadian accounts.

Adrian ReyesSenior Payments & Fintech Editor

October 29, 2026 · 9 min read

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On this page 6 sections

What Faire's Data Shows About Canadian Retailers, U.S. Brands and Tariffs
Which U.S. Wholesale Sellers Are Most Exposed to Canada's Surtax
Selling Wholesale to Canada Under Tariffs: Price on a Landed Basis
Cross-Border Wholesale Payments From Canada: Terms, Currency and FX
Keeping Canadian Accounts Without Giving Away Margin
When to Look Beyond Canada

Key takeaways

Canadian independent retailers are still spending more dollars on U.S. brands, but U.S. brands now get a smaller share of each order. That leaves room to defend accounts before they are lost.
Canada's surtax depends on where goods originate under its marking rules, not where they ship from. Qualifying for CUSMA doesn't protect a product from it.
The surtax is a percentage of invoice value, so a dollar cut from a surtaxed SKU saves the Canadian buyer more than a dollar. The invoice must always show the real price.
Longer terms, smaller minimums and clear landed-cost sheets often protect an account at lower cost than a blanket discount.

Sixty days into the latest U.S.-Canada tariff fight, Canadian independent retailers are still moving wholesale orders away from U.S. brands. Faire's tracker update, released Oct. 28, 2026, shows Canadian retailers' spending on Canadian brands up 10.7 percentage points from pre-tariff levels, compared with a 9.4-point lift at day 30. For U.S. brands selling wholesale into Canada, this is a loss of share, not a collapse in sales. Canadian retailers are still spending more dollars on U.S. products as seasonal buying picks up. U.S. brands just get a smaller slice of each order.

The clock started Aug. 25, 2026. That day Canada announced counter-tariffs on U.S. goods, and they took effect Sept. 8. Canada was responding to a 50% U.S. tariff on select Canadian goods under Section 338 of the Tariff Act of 1930, in effect since Aug. 22 with no USMCA exemption. According to the Blakes tariff timeline, Canada's surtaxes run at 15%, 25% and 50% and cover about C$27.6 billion of U.S. imports. The U.S. answered on Sept. 29 by banning imports of nearly US$1 billion of select Canadian products. Neither side has backed down as of this writing.

What Faire's Data Shows About Canadian Retailers, U.S. Brands and Tariffs

The headline numbers come from Faire's Business Wire release and its Independent Retail Tariff Data and Insights Tracker. Faire says the analysis draws on millions of transactions on its wholesale platform. That makes it a good read on independent shops: boutiques, gift stores, beauty retailers. It tells you less about big-box chains.

The data shows three things.

The shift is lopsided. Canadian brands made up about 1.5% of U.S. retailers' spending on Faire before the tariffs. That share dipped to 1.3% around day 46 and recovered to 1.4% by day 60. U.S. shops are not boycotting Canadian goods in any measurable way. Canadian shops, on the other hand, keep moving toward domestic brands.

Buyers moved before the tariffs took effect. Faire found Canadian buying started shifting right after the Aug. 25 announcement and kept deepening after Sept. 8. Your Canadian accounts reacted to the headlines, before the first surtaxed shipment cleared the border. That means what you tell them matters as much as what you charge them.

The tariffs sped up a trend that was already there. Canadian retailers' domestic-brand share on Faire climbed from 33% in January 2024, a year before the first tariff announcements, to 51% by March 2025. In July 2026, Faire had reported that U.S. brands' share with Canadian retailers was recovering, up 1.7 points year over year on a same-store basis. The August escalation cut that recovery short. Faire also found that tariffs aimed at one country move buying, while tariffs applied evenly to everyone largely haven't. Canada's surtax hits only U.S.-origin goods, so it is the kind of tariff that moves buying.

Which U.S. Wholesale Sellers Are Most Exposed to Canada's Surtax

Exposure depends on where a product originates, which is not always where you ship it from. Under the United States Surtax Order (2026), SOR/2026-186, published in the Canada Gazette, the surtax applies to listed goods that are eligible to be marked as U.S. goods under Canada's CUSMA country-of-origin marking regulations. (CUSMA is Canada's name for the USMCA.) A Legal 500 briefing notes that the test is the marking rules, not simply where a product was made, bought or shipped from.

That rule cuts both ways for U.S. brands:

U.S.-made goods on the list carry the full surtax. According to an EY tax alert, the list covers clothing, furniture, electronics, appliances and other consumer goods. A GHY International summary adds beauty and personal care, along with cooking appliances. That puts many boutique and beauty-shop staples in scope, depending on the exact tariff line.
Goods made outside the U.S. may fall outside the surtax even though a U.S. company sells them from a U.S. warehouse. They still owe Canada's regular duties.
Qualifying for CUSMA doesn't help. Baker McKenzie points out that goods qualifying for CUSMA's preferential rates can still be U.S. goods for surtax purposes. GHY warns that U.S. goods that don't qualify for CUSMA risk paying the regular duty and the surtax together.
Small parcels get no break. EY notes the surtax applies to U.S.-origin goods even when they would otherwise qualify for Canada's courier or postal import remission orders.

The practical step is a SKU audit. Pull the tariff classification codes for the products you sell most to Canada and check each one against the Department of Finance Canada's published list. The list can change, so recheck it before every buying season. Then ask a licensed customs broker to confirm origin on anything borderline. If some of your line turns out to be surtax-free, that is a selling point, and your Canadian buyers probably don't know it yet.

Selling Wholesale to Canada Under Tariffs: Price on a Landed Basis

Canadian buyers don't compare your wholesale price with a Canadian brand's. They compare what each product costs once it is on their shelf. That figure is the landed cost: price plus freight, brokerage, duty and surtax. Per EY, the surtax is charged on the goods' value for duty. The importer of record pays it, and that is usually the retailer unless you ship duty-paid.

Here is an illustrative example, with every assumption stated:

100 U.S.-made cotton tops at US$20 wholesale, assumed to fall under a 25% surtax line (check your own codes)
Value for duty equal to the invoice price
US$150 for freight and customs brokerage
No regular duty, because the goods qualify under CUSMA
Canadian sales tax on imports left out, and everything shown in U.S. dollars for simplicity
A retail price of US$43, which the retailer set at twice its pre-tariff landed cost

Per order	Before Sept. 8	After, at list price	After, 10% wholesale cut
Wholesale (100 units)	$2,000	$2,000	$1,800
Freight and brokerage	$150	$150	$150
Surtax at 25%	$0	$500	$450
Landed total	$2,150	$2,650	$2,400
Landed per unit	$21.50	$26.50	$24.00
Retailer margin at $43	50%	38%	44%

Here is the part that's easy to miss. Because the surtax is a percentage of the invoice value, every dollar you take off the invoice saves the retailer more than a dollar. In this example, a 10% cut costs you $200 and saves the retailer $250. At a 50% surtax, each dollar off would save the buyer $1.50. At 15%, $1.15.

There is one firm rule here. The commercial invoice must show the price the buyer actually pays. Writing a lower price on the invoice than the one you collect is customs fraud, and it exposes both you and your buyer. Rebates or credits issued after the goods arrive are treated differently, so ask your broker before structuring one.

Make the math easy for buyers. Add an "estimated landed in Canada" column to your Canadian line sheet, with your assumptions written underneath. Flag the SKUs that aren't surtaxed. Our guide to selling to Canada from the U.S., including payments, taxes and duties covers the basics of shipping and duties.

Cross-Border Wholesale Payments From Canada: Terms, Currency and FX

Your Canadian buyer pays the surtax at the border, weeks or months before the goods sell. That ties up their cash, so payment terms affect their decision as much as price does.

Currency. If you invoice in U.S. dollars, your buyer's bank or card issuer converts the money, and the currency risk and conversion markup sit on top of the surtax. If you invoice in Canadian dollars, you take on the currency risk instead. One middle path is a Canadian-dollar price list that is fixed for a season and reviewed on a set date, so buyers can plan. MannyPay's international payment processing includes multi-currency acceptance and a review of whether you should settle in U.S. dollars or local currency.

Cards. When a Canadian retailer pays with a card issued in Canada, your processor treats it as an international transaction. Card networks charge cross-border fees on top of normal costs, processors may add their own, and business cards generally cost more to accept than consumer cards. Pull your Canadian orders out of your statement and work out their effective processing rate on their own. If you take card payments over the phone, a virtual terminal lets you key them in from a browser.

Bank transfers. Standard U.S. ACH doesn't reach Canadian bank accounts, so most Canadian buyers pay by wire or through a cross-border payment platform. Spell out on the invoice who pays the wire fees at each end, so a payment that arrives short because of bank fees doesn't turn into a dispute. The tradeoffs between wires, FX platforms and cards are laid out in our guide to paying international suppliers, seen from the other side of the deal.

Credit risk. A retailer whose margins just fell from 50% to 38% is a weaker credit than it was in August. Keep net terms for accounts with a clean payment record. For new Canadian accounts, ask for a deposit or payment upfront.

Keeping Canadian Accounts Without Giving Away Margin

Faire's data says U.S. brands are still gaining dollars in Canada while losing share. That leaves room to defend the accounts you have. A blanket discount is the wrong tool, because it also cuts prices on goods that aren't surtaxed. These options cost less, roughly from cheapest to most expensive:

Tell buyers early. Canadian buyers acted on the announcement. Send a short note listing which of your SKUs are surtaxed and which aren't, with landed estimates.
Extend terms for proven accounts. Moving a reliable buyer from net 30 to net 60 on surtaxed lines covers the surtax cash gap at a carrying cost you can calculate.
Lower minimums or offer smaller case packs. Buyers wary of tariff-hit stock will reorder in small amounts before they drop you entirely.
Cut prices only on surtaxed SKUs. Because of the multiplier above, a targeted cut does more for the buyer than its cost to you.
Steer the assortment. If part of your line is non-U.S. origin or not on the list, feature it in Canadian presentations.

If cash is tight while you carry longer terms, our explainer on why profitable businesses run short of cash walks through the levers.

When to Look Beyond Canada

Don't count on a quick reversal. Canada's move toward domestic brands started before 2025, so ending the tariffs probably would not bring all of that share back. Other export markets aren't automatically easier. Faire reports that U.K. retailers' domestic share passed 84% by mid-2026. At home, U.S. retailers' buying mix has held steady, which makes the domestic market the steadier bet for new marketing money.

Rebalance if two things are true: Canada is a big share of your wholesale revenue, and your best-selling Canadian SKUs are U.S.-made and on the surtax list. If only one is true, defending your accounts probably makes more sense than leaving. This is general information, not legal or customs advice. Confirm classification and origin with a licensed customs broker or trade attorney.

This week, run the SKU audit and build the landed-cost column before Canadian buyers place spring orders. Then keep an eye on two risks: changes to Finance Canada's list, and further U.S. moves like the Sept. 29 import ban. If you want your cross-border card and currency costs reviewed while you reprice, request a free quote from MannyPay. A specialist responds within one business day.

Sources

About the author

Adrian Reyes

Adrian Reyes is Senior Payments & Fintech Editor for Beyond the Swipe, covering credit card processing, merchant accounts, payment technology and processing fees.

This article is for general educational purposes and is not legal, tax or financial advice. Card network rules and state laws change; confirm current requirements for your business.