Tariffs have pushed many Canadian and US firms into a holding pattern. However, duties and border policies are reshaping cross-border commerce ahead of the 2026 USMCA review, Canada’s Consul-General in Detroit (Michigan), Colin Bird, told Expana in an exclusive interview.

Current stance of businesses on tariffs

Bird said the dominant trend he is seeing with tariffs is businesses pausing investment and operations. “The primary impact is that companies are stepping back into a wait and see mode until terms of trade become clearer. I have not seen a lot of firms moving their footprint from Canada into the US. Instead, they try to adapt and manage the moment until it becomes clear how things will work. There is also a huge impact on bottom lines of Canadian companies. When bottom lines are hit, that also impacts the ability of Canadian businesses to invest into the US.”

Border infrastructure and cross-border sentiment

Bird said the Consulate’s work focuses heavily on cross-border infrastructure and on tracking business sentiment in Ottawa. “We sit right at the largest border crossing between the US and Canada. The Ambassador Bridge handles about 25% of land-based trade between the two countries. Making sure our joint infrastructure works is a big part of the mandate. There is a lot of interest back in Ottawa about business sentiment and what the marketplace is doing. This is a major market for Canadian producers. We coordinate with US state governments to jointly market what is really a binational economic region to the rest of the world.”

On the Gordie Howe International Bridge, due to open next year, Bird said, “We’ve been running one-quarter of US-Canada trade over what is almost a hundred-year-old bridge. So, when that comes online you will have six new lanes, 36 new customs booths, state-of-the-art resources for facilitating commerce, and a highway-to-highway connection.”

Impact of the 45% softwood lumber tariff

Bird said a recent 45% tariff on softwood lumber is drawing attention in the Midwest and underscores the need for faster, regionally informed decision-making. “The Midwest is primarily a timber consuming region, as opposed to a timber producing region. There is a lot of awareness building that we do about the impact of what is now essentially a 45% tariff on softwood lumber. One thing that I think we’re seeing in both of our countries, including here in the Midwest, is a real desire for decisive leadership from politicians to address the fact that we are in a much more competitive world than we used to be. So, decisions have to move more quickly.”

“We encourage our impacted American partners to make clear the impacts to the region,” Bird added. “Our view is the more reality-based the conversation becomes, the more business-focused it becomes, then the value proposition that is the US-Canada relationship also improves. That was certainly our experience when we renegotiated NAFTA. When the mutual interest that Canada and the US had in revitalizing manufacturing in the heartland and bringing back supply chains back to North America was made clear, that became a very successful negotiation. The most important thing that we can do for Canadian business is to show the value it provides to not just the American consumer, but the American manufacturer and the American competitive position in the broader world.”

Looking ahead to the 2026 USMCA review, Bird said the six-year review mechanism was designed to keep the agreement up to date and that businesses on both sides largely find the rules effective. “What I hear from businesses on both sides of the border is that the rules work,” he commented. “We’ve seen record breaking investment on the Canadian side, particularly in the auto sector. We’ve also seen a 20% increase in US manufacturing exports to Canada, and you’ve seen a major increase in US-Canada trade. So, it’s performing as desired. If you look at wage rates for manufacturing in the US Midwest, it’s performing as intended. We go into that negotiation hearing a very strong message from businesses on both sides of the border that the rules are working, and the uncertainty in the marketplace now from tariffs are causing instability and investment chill. The most important thing we can do for businesses on both sides of the border is to bring back a sense of predictability and stability to the marketplace.”

Shifting focus from tariffs to regulatory alignment

“We need to refocus away from what has been a mutually harmful conversation on tariffs to focusing on where we can do regulatory alignment and where we can both address unfair offshore trade that is damaging both of our economies. We would be much better off if Canada and the US were laser-focused on our infrastructure for getting our products to global markets fit to task,” Bird went on to say.

Bird described close engagement with state governments across his territory, noting Canada is the largest export market for every state he covers and that much of Canadian exports serve as inputs for US manufacturers.

Navigating policy shifts: information, connections, and opportunities

To help businesses navigate shifting policy, Bird said the Consulate provides current information, connects firms with US supply chains and makes introductions to market opportunities. “We try and give Canadian businesses a sense that we are pursuing the joint relationship in a way that makes sense. Our officers here do a lot of work helping connect Canadian firms with US supply chains and identify market opportunities in the US and really making connections and introductions,” he said.

Bird argued that industry feedback is crucial to shaping negotiators’ understanding of how decisions made in Washington and Ottawa affect firms, citing the renegotiation of NAFTA as an example where granular supply chain knowledge mattered. He said, “When we renegotiated NAFTA, we were focused on creating new incentives for increasing North American manufacturing and developing supply chains. To do that and use the levers of trade policy, you must understand at a very granular level the supply chains of companies that trade across the border. Our mission and consular network feed that information to negotiators, so policy reflects business reality.”

Tariffs, compliance, and adaptability

Bird urged firms to seek strong advice and prioritize compliance as tariffs and trade measures change frequently. “Keeping on top of that and making sure you’re in a position to keep compliance. That requires spending a lot more time and energy when it’s a very fluid situation than when it’s more predictable.”

Asked whether anything has been left out of public debate on tariffs and trade, Bird said the need for close cooperation among like-minded allies has not been sufficiently emphasized in the US political context. “The key reality that we’re all encountering right now is that we are living in a much more competitive world. That means that there is more need, not less, for allies that share the same values, share the approach to doing business to be working closely together. I think that message has not been clear enough in the US political context. Canada stands ready and willing to be a partner to the US, to ensure we remain prosperous and world leaders in terms of our technical expertise and our capacity to outcompete the world.”

Canada’s responses to tariff effects

Bird outlined steps the Canadian government is taking to offset tariff effects. “Canada is heavily invested in building up our internal markets,” he said. “The government’s new budget contains CAD 130 billion for housing over five years and major new investments in trade diversification. We’re really trying to remove regulatory impediments. I think that’s a great optimistic development that has come out of the tariff challenges.”

“Some of the analysis has said that we could see a 2-3% gain in GDP just from removing those internal trade barriers. This is more than what some of the worst-case scenarios had been predicted about the tariff hit to Canada. We have a unity on the Canadian side that is a huge asset to us, and we have an outreach with our other trading partners that is already showing significant signs of paying off,” he said.

“Canada stands ready to be a partner to the US. The world is more competitive than before. There is more need for allies who share values and approaches to business. If we focus on regulatory alignment, trade diversification, and infrastructure to get products to global markets, that reduces costs for business and protects shared prosperity.”

Co-authored by Simon Duke, Managing Editor, Expana