Morgan McLellan is co-founder and managing partner of Sovereign, a strategic, financial and crisis communications advisory firm.
The latest escalation in the Canada-U.S. trade war should eliminate any lingering hope that Canadian companies can simply wait for the uncertainty to pass.
Beginning August 19, the United States plans to impose additional 50 per cent tariffs on nearly $20 billion worth of Canadian goods, including products that comply with CUSMA. The list stretches from clothing and wine to cement and hockey equipment. It is the kind of sweeping action that can abruptly change the economics of a business.
The federal government must continue fighting for Canadian interests. But companies cannot leave the job of explaining what the trade war means to politicians, industry associations or economists.
Those voices can explain the broader dispute, but only management can tell shareholders, employees and other stakeholders how tariffs affect a company’s finances, operations and workforce and what it is doing in response. Without that clarity, they are left to draw their own conclusions, often assuming the worst.
Uncertainty not an excuse for silence
Investors, employees, customers and communities want answers from the people running the businesses affected. What is the company’s exposure? Which products, facilities and jobs are vulnerable? Can costs be passed on, absorbed or avoided? Is management diversifying its markets, moving production or renegotiating contracts?
These are difficult questions, especially when U.S. policy can change with a presidential Truth Social post. But uncertainty is not an excuse for silence.
Canada Goose offers a useful example. After reporting stronger-than-expected quarterly revenue, the company told investors that the new U.S. tariffs could reduce its operating margin by as much as two percentage points in fiscal 2027. The estimate may change as trade negotiations continue, but it gives investors a clearer sense of the potential financial impact and demonstrates that management is planning for it.
No company knows how this trade war will end. But Canada Goose was right to quantify the risk and explain what it could mean for its financial performance. That allows investors to judge whether the threat is severe, manageable or somewhere in between and whether leadership understands what is at stake.
Markets price exposure into valuations
That clarity is important because markets are already pricing trade exposure into company valuations. Canada Goose’s U.S.-listed shares declined despite the company reporting stronger-than-expected revenue. The tariff warning was not the only factor, but the reaction demonstrates how quickly trade exposure can become part of the valuation conversation.
If Canada Goose demonstrates the importance of quantifying the risk, Magna International shows the value of explaining how it will be managed. The Canadian auto-parts manufacturer has acknowledged the additional costs created by tariffs while detailing how it is recovering some of those costs from customers and tightening its operations.
In its latest quarterly results, Magna said faster tariff recoveries helped improve its second-quarter profit margin and that it expects the overall impact of tariffs in 2026 to be broadly neutral. That gives investors more than an assessment of the threat as it shows them how management is containing it.
But the consequences of uncertainty extend well beyond share prices. Employees worry about layoffs. Suppliers become more cautious. Communities fear lost jobs and tax revenue. When leadership fails to explain the company’s exposure and response plans, uncertainty can spread through every stakeholder group connected to the business.
Canadian CEOs cannot predict every decision coming out of Washington, particularly under an administration whose trade policy can shift quickly. Nor should they suggest that market diversification or government support will eliminate the damage. Credible communication means being clear about what is known, what remains uncertain and what management can control.
Saying only that the company is “monitoring the situation” does little to reassure stakeholders. Instead of signalling appropriate caution, it can leave the impression that management is unprepared.
This is not about revealing commercially sensitive information. It is about demonstrating that leadership understands the risk and is actively governing through it.
Ottawa’s job is to negotiate trade policy. A CEO’s job is to explain how the company will navigate the consequences. Companies that do this well will not eliminate uncertainty, but they can preserve confidence through it.
Those that retreat behind generic statements risk allowing others to define their exposure, resilience and prospects for them.
The strongest leaders communicate early, quantify the risk where possible, explain the actions being taken and provide regular updates as conditions change. In a trade war that is evolving by the day, corporate communications must keep pace.
In this uncertain trade environment, silence is not caution. It is a risk and markets will price it accordingly.
