By Brooke Thomson
President and CEO

Three-quarters of AIM member companies have seen negative consequences from tariffs and remain concerned about the most recent flare-up of the trade war between the United States and Canada, according to a new survey by the statewide business association.

The survey found that 73 percent of companies were either “moderately concerned,” “very concerned” or “extremely concerned” about the Trump Administration’s announcement in July that the US would impose 50 percent tariffs on about $20 billion worth of Canadian goods. Canada subsequently announced that it would match U.S. levies dollar-for-dollar with 15 percent, 25 percent, and 50 percent tariffs on hundreds of American imports.

The new round of tariffs has significant implications for the economic relationship between Massachusetts and its second largest trading partner. Massachusetts companies export $3.1 billion worth of goods and $3.0 billion worth of services to Canada each year. Businesses in the commonwealth import approximately $10.5 billion of Canadian goods each year, with almost a third of that total represented by energy products.

Major Massachusetts goods exported to Canada span sectors like equipment and machinery, chemicals, minerals and metals, plastics and rubbers, and agricultural products. Specific leading product categories include optical, medical, and precision instruments, computers, pharmaceuticals, aircraft parts, and paper products.

The survey confirms what we hear almost every day from AIM members who fear that on-again-off-again US tariff policies are raising material prices, disrupting supply chains and narrowing opportunities to expand in overseas markets like Canada.

How are employers responding to the new round of tariffs? The survey found that 46 percent are adjusting pricing strategies, 27 percent are sourcing domestically, and 24 percent are diversifying suppliers.

The broader effects of tariffs include upward pressure on inflation, which continued at a strong 3.4 percent rate in August. The AIM survey found that 53 percent of employers expect the pricing of their products to increase as a result of the trade levies.

Concern about tariffs is also showing up in the monthly AIM Business Confidence Index, which fell 5.3 points into pessimistic territory in August after a broad new set of tariffs was announced.

“The tariffs have substantially impacted one half of our businesses, and now the Canadian tariffs are only making the situation worse,” wrote the CEO of a manufacturing company.

Another employer wrote: “Business outlook for retail is dampened due to increased pressure on consumers due to persistent inflation and tariffs. Direct (high gas prices) and indirect (consumer and retailer unease) impact of the conflict in Iran are impacting sales despite government efforts to mitigate the perception of these issues.”

Fraying relations between the North American neighbors is affecting tourism as well.

According to The Boston Globe, the number of inbound Canadian visitors to the United States has dropped precipitously. A Canadian government report found a 25 percent decline in the overall number of Canadians who visited the US in 2025 compared to 2024. That’s 7 million fewer Canadians spending $3.3 billion less in the US in 2025 versus 2024.

The AIM tariff survey was taken during the first two weeks of September and generated responses from 41 companies, mostly manufacturers.