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The U.S.-Canada Trade Shift:

The U.S.-Canada Trade Shift:

What Tariffs Mean for Side Hustles in 2025

Greg K. Campbell
February 09, 2025

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Main Message: Use the potential tariffs to embrace the digital part of your side hustle. Start being resilient and expand strategically. 🚀

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Navigating U.S. Tariffs for Side Hustles

New U.S. tariffs on Canadian imports are set to reshape cross-border trade, potentially reducing Canada’s GDP by 2.5% by 2026. These policy changes threaten supply chains, cost structures, and small businesses relying on international trade. However, side hustle and small business owners can mitigate risks and even capitalize on new opportunities by leveraging strategic partnerships and network leverage to adapt.

Key Insights: Using Leverage to Overcome Tariff Challenges

1. Assess Exposure & Build Supply Chain Partnerships

Rather than absorbing rising costs alone, you should evaluate your reliance on tariffed goods and seek other sourcing options. Instead of solely looking at domestic suppliers, strategic partnerships can provide access to tariff-free goods through joint ventures, supplier alliances, or group purchasing.

💡 Strategic Moves:
✅ Partner with import/export specialists to navigate trade policies and uncover duty-free zones
✅ Leverage supplier networks to access bulk purchasing power and secure better deals
✅ Negotiate shared warehousing and distribution deals with businesses facing similar challenges

Example: A side hustle selling handcrafted furniture sourced from the U.S. faced rising costs due to wood tariffs. By partnering with a Canadian-based bulk supplier, you can secure lower per-unit costs and reduce overall expenses.

2. Leverage the digital services aspect of your side hustle

Tariffs primarily affect physical goods, but digital services, e-commerce, and knowledge-based businesses remain largely unaffected. This presents an opportunity for entrepreneurs to pivot into less tariff-sensitive industries while expanding their customer base by growing your networks.

💡 Strategic Moves:
✅ Expand into digital service partnerships—web design, marketing, and automation are unaffected by tariffs
✅ Use affiliate partnerships & influencers to enter new e-commerce markets with lower import risks
✅ Leverage online marketplaces & Canadian fulfillment networks to avoid U.S. import duties

Example: A side hustle selling custom apparel partnered with a U.S.-based print-on-demand supplier and increased reach with podcasts to fulfill orders directly from the U.S., avoiding tariffs on bulk shipments while expanding their customer base.

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Case Study: The Automotive Industry’s Strategic Shift

The automotive industry, heavily dependent on cross-border supply chains, provides a key lesson in strategic adaptation. A single auto part often crosses the U.S.-Canada border multiple times, compounding tariff costs at each stage.

A Canadian auto parts manufacturer faced a 15% production cost increase due to tariffs. Rather than absorbing the costs, the company leveraged strategic partnerships with a U.S.-based distributor, shifting final assembly across the border to minimize tariff exposure. This move not only preserved profit margins but also enhanced operational efficiency.

Side Hustle Takeaway:
Even small businesses can apply this strategy by forming joint ventures, warehousing partnerships, or fulfillment center arrangements to reduce the impact of tariffs.

Opportunities: Where to Leverage & Pivot

1. Nearshoring & Shared Production Networks

Tariff fluctuations are pushing businesses toward nearshoring (moving operations closer to home) and regional supplier networks. Side hustles can capitalize on this shift by leveraging partnerships in:

🔹 Technology & automation – Businesses need AI-driven logistics and inventory management solutions
🔹 Supply chain consulting – Helping small businesses optimize their logistics & sourcing strategies
🔹 Canadian-based fulfillment services – Providing local warehousing for U.S. companies to bypass tariffs

Example: A side hustle in e-commerce partnered with a logistics startup to offer Canadian fulfillment for U.S. brands, generating passive income from storage fees while avoiding cross-border tariff headaches.

2. Invest in Logistics & Smart Trade Partnerships

Advanced logistics solutions can minimize tariff exposure by optimizing trade routes, finding cost-effective suppliers, and improving cross-border efficiencies. Strategic partnerships with logistics firms, customs brokers, and trade consultants can unlock better shipping rates and cost-saving solutions.

💡 Strategic Moves:
✅ Partner with logistics startups or fulfillment providers offering cross-border compliance solutions
✅ Leverage trade groups and industry associations for tariff-reduction strategies
✅ Form cooperative shipping alliances to pool resources and reduce costs

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