On February 1, 2025, President Donald Trump announced plans to impose a 25% tariff on imports from Canada and Mexico, and a 10% tariff on imports from China. And an additional 10% tariff specifically on Canadian energy products.
The Canadian trucking industry is at the forefront of this new situation. In response to these tariffs, the Canadian government retaliated with 25% against $155 billion worth of US goods. An initial $30 billion in tariffs took effect immediately, with the remaining $125 billion scheduled to be implemented within 21 days.
As per Trump, these were implemented because of “major threat of illegal aliens and deadly drugs killing our Citizens, including fentanyl”. However, the truth is less than 1% fentanyl and illegal immigrants cross into the US from Canada.
How is the trucking industry affected?
Approximately 100,000 full-time truckers handle 85% of surface trade with Mexico and 67% with Canada. These tariffs put their livelihoods at risk as they’ll reduce cross-border traffic. If orders decline, trucking companies will see fewer cross-border shipments, directly reducing income for thousands of drivers.
Smaller fleets and independent owner-operators will be hit the hardest. Large freight carriers may be able to absorb temporary trade slowdowns, but independent truckers who rely on consistent shipments could see significant losses.
It could also make expanding fleet more expensive
Industry experts estimate that tariffs on truck components could increase the price of a new truck by up to $35,000. Higher costs mean some truckers will delay purchasing new equipment. Old trucks need more maintenance and become more unreliable with excessive use.
Replacement parts, tires, and technology systems will also become more expensive. Carriers may need to pass these increased costs onto shippers, which could, in turn, raise the prices of everyday goods.
Does it mean there will be potential layoffs?
According to the Canadian Trucking Alliance (CTA), several trucking companies have canceled customer orders and laid off employees due to the uncertainty surrounding these tariffs. If trade disruptions continue, more companies will need to cut expenses, and labour is often the first place they look.
Some independent owners and operators might have to quit completely. It also means more frequent inspections that could delay deliveries for several hours. Delay in delivering perishable goods like fresh produce, dairy, and meat, could lead to spoilage, rejected loads, and lost revenue.
If truckers lose steady cross-border contracts, they may have to compete for domestic freight, which is already oversaturated due to industry slowdowns.
Next steps for truckers
While this is a turning point for the industry, truckers need to stay consistent at their jobs. Despite the one-month delay, we advise you to stay cautious and monitor updates closely. Follow industry groups like American Trucking Associations (ATA) or Owner-Operator Independent Drivers Association (OOIDA) for updated and accurate information.
Experienced truckers would have an easy time switching to domestic routes but need to accept a lower pay. Clients may be reworking their logistics strategies due to trade uncertainties. Keep in touch with them, communicate your flexibility and adaptability in this change.
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