Canada faces broader economic vulnerability to U.S. tariffs than many American jurisdictions despite tariff exposure being concentrated in a smaller number of U.S. states and industries, according to a new report from Cushman & Wakefield.
The report, The Scale of It All: Updates on the Most Recent U.S.-Canada Tariffsreleased Sept. 3 ahead of a new round of Canadian retaliatory tariffs on about $27.6 billion of U.S. imports scheduled to take effect Sept. 8, examines tariff-weighted trade exposure across North America and the potential implications for regional economies and commercial real estate markets.
It finds that tariff exposure varies significantly by geography, industry concentration and the role cross-border trade plays in local economies.
Canada’s trade dependence creates broader vulnerability
Maryland, Kentucky, Texas and Michigan rank among the most tariff-exposed jurisdictions in North America. In Canada, however, the vulnerability is tied more closely to the economy's dependence on trade with the United States.
Manitoba, Ontario and New Brunswick have bilateral trade volumes equivalent to 32 per cent, 26 per cent and 24 per cent of their respective provincial gross domestic product, according to the report.
Ontario has the highest tariff concentration among Canadian provinces, reflecting its integration into automotive, machinery, manufacturing and metals supply chains that cross the Canada-U.S. border multiple times during production.
"The headline finding is that exposure and vulnerability are not the same thing," said Cameron Martin, Canada Research Manager with Cushman & Wakefield’s Global Think Tank. "While many U.S. states are far more concentrated in tariffed products, Canada's economy is significantly more dependent on trade with the United States. That means changes in trade policy can have broader implications for business investment, economic growth and occupier decision-making across Canadian markets.”
The research comes as Canada-U.S. trade policy continues to evolve, with both countries having implemented tariffs, countermeasures and sector-specific restrictions since early 2025.
Canada and the United States conduct more than $870 billion in annual bilateral trade, according to the report.
Tariffs could affect investment and supply chains
Cushman & Wakefield said tariffs can affect businesses through higher input costs, supply-chain disruptions and greater uncertainty around capital investment decisions.
At the same time, changes to sourcing and production strategies could create opportunities for Canadian industrial real estate markets as companies reassess their supply chains, inventory levels and domestic manufacturing capabilities.
"Many occupiers are already evaluating how to make their supply chains more resilient," Martin added. "Whether through supplier diversification, increased inventory holdings or investments in domestic production, those changes could generate new demand for manufacturing, warehousing and distribution space across key Canadian markets over time."
Industrial real estate could see changing demand
The report cautions that tariffs are one factor affecting real estate demand rather than the primary driver of market performance.
Changing trade patterns could nevertheless influence where industrial demand emerges and the types of facilities companies require, including logistics hubs, bonded warehouses and manufacturing facilities.
Cushman & Wakefield identified three areas to watch as the trade environment develops: the long-term restructuring of North American supply chains, Canada's efforts to diversify trade relationships beyond the United States, and future policy decisions affecting the Canada-United States-Mexico Agreement and the broader North American trade environment.