A new report from data and analytics firm NielsenIQ (NIQ) is raising concerns for Canadian manufacturers and exporters tied to the U.S. market. The April 9, 2025 edition of Tariffs Perspectives by Category reveals that more than $27 billion in Canadian exports are potentially exposed to U.S. trade tariffs, including a wide array of goods in food, health and beauty (HBA), and household care categories. Although tariffs between the U.S., Canada, and Mexico are currently paused, the report underscores the fluidity of the trade environment and suggests brands must prepare for disruption.

Canadian Food Exports to the U.S. Face Significant Tariff Risk

In terms of volume and value, Canadian food exports represent the largest category of concern. NIQ estimates that approximately $15.2 billion in food and produce is imported into the United States from Canada annually, with the Eastern U.S. accounting for 63 percent of these import sales. Several everyday grocery items dominate the list, including confectionery at $647 million, cookies at $563 million, chocolate at $471 million, and muffins and cakes together exceeding $600 million. Granola bars, crackers, and cucumbers are also notable contributors to the trade flow. These figures signal the high degree of integration between Canadian food production and U.S. consumer demand.

Chris Costagli, Vice President of Food Insights at NIQ, noted that tariffs could have a significant effect on grocery and produce departments in the U.S., particularly for weather-sensitive categories such as fruit and vegetables. He said manufacturers must focus on strategic sourcing and leverage regional distribution strengths to maintain availability and meet consumer demand in the event of renewed tariffs. The implication for Canadian exporters is clear: disruption in even one of these categories could have cascading effects on pricing and shelf presence in a key international market.

Health and Beauty Products from Canada at Risk of Supply Chain Disruption

The health and beauty sector is also highly exposed. According to the report, $1.9 billion in HBA products are imported into the United States from Canada. Key product types include facial skin care, accounting for $482 million in U.S. sales, followed by deodorant at $361 million, hair care at $339 million, and hand and body lotion at $220 million. These figures point to the essential role Canadian manufacturers play in supplying personal care items to U.S. retailers. The Southern U.S. was identified as the leading region for Canadian HBA imports, accounting for 42 percent of related dollar sales.

Jo-Anne Lynch, Vice President of Beauty Vertical Insights at NIQ, warned that tariffs could raise production costs and disrupt supply chains, which may in turn lead to higher prices for consumers and weakened demand. She added that while large multinational beauty brands may find ways to shift sourcing, smaller and emerging players could struggle to adapt. Lynch also emphasized that current “deconsumption” trends in beauty — where consumers reduce product usage or simplify routines — could intensify if prices rise, further threatening volume sales.

Household Care Imports from Canada Show Signs of Decline

Though smaller in dollar value compared to food and beauty, Canadian household care exports also carry exposure. The report places the annual total for these products at approximately $30.6 million. Leading items include cleaning implements, which make up the bulk of Canadian-origin household care imports, along with fabric treatments and laundry detergent. While this segment is not as large as that of Canadian competitors in Mexico, the report indicates that imports from Canada have declined both in dollar sales and in-store distribution. Many of these products are now primarily sold in legacy retail channels and through Amazon, which has become an important growth outlet for the category.

Jake Del Valle, Vice President of CPG Insights at NIQ, highlighted that manufacturers must be mindful of potential peripheral impacts tied to fluctuations in oil and gas prices, particularly given Canada’s role as a supplier. He said changes in transportation and packaging costs could further destabilize Canadian-origin household products sold into the U.S. market.

Temporary Suspension of Tariffs Offers Only Short-Term Relief

Although the current trade environment includes a temporary suspension of tariffs between the U.S., Canada, and Mexico, the NIQ report makes it clear that this pause is not a long-term guarantee. Maria Maysonet, Insights Director at NIQ, stated that manufacturers must prepare for possible shifts in policy and emphasized the urgency of stabilizing operations. She pointed to more than $26 billion worth of food imports alone as being directly exposed to potential price increases. Categories such as cookies, chocolate, and crackers were singled out as especially vulnerable, with consumers in those aisles already facing inflationary pressure and reducing purchases. Households with children are among the most impacted, changing snacking habits in response to rising costs.

U.S. Shopper Trends May Influence Future Demand for Canadian Goods

The report also provides useful insights into U.S. consumer attitudes toward tariffs and pricing. According to a January 2025 NIQ survey of 1,001 shoppers, 34 percent of respondents said they would prioritize U.S.-made products to avoid tariff-driven price hikes. However, more than half indicated that their decisions would continue to be based on price differences and perceived quality. The survey revealed that 80 percent of shoppers want transparency from brands if tariffs lead to price increases, with younger and higher-income consumers the most likely to check sourcing information and respond to origin labeling.

These shifts in consumer behaviour offer both challenges and opportunities for Canadian companies. While some shoppers may opt for domestic alternatives, others remain loyal if Canadian products can compete on value and quality. In particular, Millennials and households earning over $100,000 annually were identified as high-value import buyers, and they are most engaged with Canadian-made products. This suggests that exporters who can reinforce quality messaging and align with transparency expectations may be better positioned to weather any trade turbulence.

Canadian Manufacturers Must Prepare for Trade Volatility

The report’s overarching message is one of preparation. For Canadian exporters embedded in the U.S. retail ecosystem, especially in high-volume categories like food, HBA, and cleaning products, the risks associated with tariff reinstatement are substantial. While the political environment remains in flux, and while tariffs are on hold for now, NIQ’s research makes it clear that the situation could change quickly — particularly as the U.S. enters an election cycle.

Canadian manufacturers and retailers are encouraged to assess their supply chain vulnerabilities, evaluate pricing strategies with elasticity in mind, and prepare regionally targeted responses for the U.S. market. With over $27 billion in exports at stake, the ability to adapt quickly and transparently could be the difference between resilience and market erosion.

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