Canadian Manufacturers Weigh U.S. Relocation Amid Trade Uncertainty

A KPMG Canada survey of 275 manufacturing leaders reveals that 42 % have already moved production to the United States or are actively considering it, and 77 % of those evaluating relocation expect to act within the next two years. While most firms keep their headquarters in Canada—80 % intend to stay and only 11 % contemplate moving head offices—the prospect of locating new factories south of the border is gaining traction as executives seek to reduce exposure to tariff volatility and preserve access to the large American market.

Trade uncertainty pushes more Canadian manufacturers to consider moving south

The same poll shows deep investment hesitation: 57 % of respondents have paused, reduced, or cancelled capital-expenditure projects, and 42 % have scaled back research and development spending. Over half (52 %) describe their operations as being in “endurance mode,” a state in which companies sustain short-term cash flow but defer long-term upgrades to equipment, robotics, automation and AI. Survey participants cite not only tariff risk but also energy costs, labor availability, taxation, infrastructure and regulatory certainty as factors shaping where future capital will be deployed.

Trade uncertainty pushes more Canadian manufacturers to consider moving south

Anamika Gadia, Partner and National Leader of Industrial Markets at KPMG Canada, emphasizes the shift from short-term survival to prolonged endurance. She warns that while manufacturers have shown resilience, “companies can’t remain in a holding pattern indefinitely.” Gadia argues that sustained uncertainty will increasingly dictate decisions about where investment, production and growth occur, and that government action on competitiveness, taxation, regulations and trade will be pivotal in retaining future manufacturing capacity in Canada.

Four in 10 Canadian manufacturers eye U.S. production moveTrade uncertainty pushes more Canadian manufacturers to consider moving south

If the current pause in capital spending persists, Canada risks losing not only immediate production contracts but also the long-term economic benefits tied to new factories, automation projects and supplier ecosystems. Converting operational resilience into renewed investment confidence will require predictable trade relationships, competitive tax policies, efficient permitting, reliable infrastructure and clear industrial strategies. The survey suggests that the next decade’s manufacturing landscape in North America may be shaped more by where firms feel secure to invest than by the tariffs that initially sparked the relocation debate.

Trade uncertainty pushes more Canadian manufacturers to consider moving south

• “Last year, the conversation was about survival. This year, it’s about endurance,” — Anamika Gadia, KPMG Canada

Four in 10 Canadian manufacturers eye U.S. production move

• “Manufacturers have shown incredible resilience, adapting to tariffs and uncertainty to navigate this period of heightened volatility.” — Anamika Gadia, KPMG Canada

Four in 10 Canadian manufacturers eye U.S. production move

• “Companies can delay investments, absorb higher costs and adjust their operations, but they can’t remain in a holding pattern indefinitely.” — Anamika Gadia, KPMG Canada

Four in 10 Canadian manufacturers eye U.S. production move

• “At some point, uncertainty begins to shape long-term decisions about where investment, production and growth will occur.” — Anamika Gadia, KPMG Canada

Four in 10 Canadian manufacturers eye U.S. production move