Canada Ends Tariffs—Life Sciences Still at Risk
General
Key takeaways
Canada will remove retaliatory tariffs on most U.S. goods under USMCA, effective September 1, 2025.
Tariffs on autos, steel, and aluminum—key materials in med-tech manufacturing—will remain.
Life sciences sectors, including pharmaceuticals, biotechnology, and medical devices, rely heavily on cross-border trade and remain vulnerable to cost pressures and supply chain disruption.
Canadian life sciences exports to the U.S. exceed $19 billion annually, making tariff stability vital.
Mercury delivers compliant, cost-effective logistics solutions to help clients adapt to shifting trade policies while focusing on core research and innovation.
Canada Lifts Retaliatory Tariffs—but Life Science Industries Still Face Challenges
Policy Shift: What’s Changing—and What Isn’t
On August 22, Prime Minister Mark Carney announced the removal of retaliatory tariffs on U.S. goods covered under USMCA, aligning tariffs with U.S. policy and restoring tariff-free trade for over 85% of bilateral commerce. However, tariffs on autos, steel, and aluminum—critical inputs for medical device and diagnostics production—remain unchanged.
This move follows months of trade friction, during which Canada imposed countermeasures on approximately $50 billion in U.S. goods, including pharmaceuticals and lab supplies.
Life Sciences Industry: Implications & Risks
1. Pharmaceuticals & Biotech
All stages—from API sourcing to finished product—depend on tariff-free access. Disruption can impact drug development and cost-efficiency.
Industry groups and pharmacists have urged exclusion of medications from tariff lists, citing supply vulnerability.
Medical Devices & Diagnostics
Devices often contain steel or aluminum. Persisting tariffs can elevate production costs and delay access to diagnostic tools, impacting healthcare providers.
Trade agreement provisions under CUSMA support regulatory alignment, but tariff instability could still disrupt streamlined approvals and cross-border supply chains.
3. Healthcare Providers & Hospitals
Hospitals rely on imported equipment—from imaging machines to daily medical disposables. Higher costs or delays threaten service delivery and inflate budgets.
Surveys forecast rising procurement costs of up to 15%, straining financing and potentially increasing patient costs.
Summary Table: Tariff Impact on Life Science Segments
Sector | Benefits from Tariff Removal | Remaining Risk (Steel, Auto Tariffs) |
|---|---|---|
Pharmaceuticals & Biotech | Lower API and component costs | Ongoing supply cost pressure |
Medical Devices & Diagnostics | Easier cross-border compliance and shipping | Higher manufacturing costs |
Hospitals & Healthcare Providers | Reduced prices on general imports | Higher costs for critical equipment and supplies |
How Mercury Supports Life Science Operations Through Tariff Changes
1. Regulatory-Savvy Logistics
We help you navigate tariff exemptions under USMCA and manage documentation for medical and pharmaceutical shipments.
2. Cost-Safe Routing
Mercury optimizes routing to avoid tariff-heavy bottlenecks where possible. We proactively monitor sector-specific regulatory changes.
3. Supply Chain Continuity
Even in metal cost fluctuations, Mercury’s logistics strategies ensure your supply chain stays reliable—from raw materials to clinical delivery.
4. Focus on Innovation
With Mercury handling shipping complexity, your R&D and commercialization teams can focus on saving lives—not tracking supplies.
Canada’s tariff rollback is a step toward stability—but life science industries cannot yet relax. With critical tariffs still in place and lingering trade uncertainty, businesses must remain vigilant.
Contact Mercury today to strengthen your logistics strategy and keep your operations resilient, compliant, and on the cutting edge.
