This week, a look at the rising tensions between the U.S. and Canada, and the Canadian brands trying to tune them out as they pursue the American market.
Over the last year, the historically cozy relationship between the U.S. and Canada has turned frosty.
The Trump administration’s tariffs and bellicose rhetoric have damaged diplomatic relations between the countries, leading to lower tourism from Canada and business leaders canceling trips to the U.S. Canadian Prime Minister Mark Carney stated this week that Canada should begin looking to other countries to form trade relationships.
For many Canadian fashion brands, the turmoil comes at an inopportune time. Many of them are looking to expand into the U.S. as tariffs on Canadian goods recently came down to 10% from a high of 50%. Glossy spoke with several Canada-based brand leaders in the midst of U.S. market expansions about the challenges they’ve faced.
So far, the vast majority of issues have been caused by tariffs. Jack Victor, a century-old manufacturer of tailored menswear based in Montreal, is expanding its U.S. presence by opening a new office and showroom in Manhattan, with plans to open retail stores in the U.S. soon.
As part of the United States-Mexico-Canada Agreement (USMCA) — the successor trade agreement between Canada, the U.S. and Mexico to NAFTA — Jack Victor can still ship most of its Canadian-made goods into the U.S. duty-free.
The USMCA allows goods made entirely within the three countries to be shipped between them duty-free, but not every Canadian brand manufactures domestically. The USMCA is due for review in July, when the three countries will decide whether to extend it or make amendments.
The tense relationship between all three USMCA countries ahead of the review doesn’t bode well for any changes, and Canadian brands need to be prepared for the arrangement between Canada and the U.S. to be very different in a few months’ time.
“On top of that, the political tension is making some U.S .stores hesitant to carry Canadian brands, and Canadian shoppers are pulling back from U.S. goods, too,” said Kyle Peacock, partner at Peacock Tariff Consulting. “Margins are getting squeezed from both sides. A couple of our clients are experiencing this currently.”
Jack Victor’s sportswear and other products, made in Italy, are subject to the current 25% E.U. tariff, threatening the prospect of selling more in the U.S.
“Like everyone, tariffs brought us a lot of uncertainty,” said Steven Victor, managing director of the company. “A lot of the tailored clothing produced in North America comes from Canada, and for our retailer partners in the U.S., there’s a ripple of uncertainty across all the vendors.”
Jack Victor is a large company in Canada, with over 1,000 employees across 14 floors in Montreal, producing over 5,000 garments a week and selling to 300 stores across Canada and the U.S., including Bloomingdale’s and Nordstrom.
Despite having no stores of its own in the U.S. yet, U.S. sales account for about 80% of Jack Victor’s business. And Steven Victor himself is a dual U.S.-Canadian citizen.
“We have, kind of, tunnel vision when it comes to politics,” Victor said. “We need Canada and the U.S. to cooperate. We have a lot of Canadian pride, and people in Canada are coming to us because they feel slighted and want to buy Canadian. But we’re developing an exclusive America 250th [anniversary] collection for Nordstrom, so we’re still leaning into the U.S.”
Sam Vise, CEO of the Toronto-based retail tech company Optimum Retailing, said brands that are already integrated across the U.S. and Canada face greater challenges than brands that have yet to expand to the U.S. since their supply chains are already in place.
“Tariffs, cross-border uncertainty and fluctuating import costs make it difficult to stay operationally agile,” Vise said. “Consumer demand can shift dramatically from one market to the next, making it harder for retailers to plan inventory and merchandising strategies with confidence. Canadian brands are navigating an added layer of complexity as those challenges are further intensified by tariffs, political tensions and broader economic uncertainty.”
The effect of tariffs and continued political tensions has had the most notable impact on smaller brands, according to Canadian designer Krista Norris. Norris sells her clothes to specialty retailers and boutiques in New York City, but she told Glossy that tariffs and the end of the de minimis exemption, which went into effect on Canada in February, have been challenging. It has made her, and other small Canadian brands, stop shipping to the U.S. entirely.
“Removing the de minimis exemption had a very negative effect on small businesses exporting,” Norris said. “Large brands with distribution facilities already in the U.S. would have had it easier, while tariffs affected us just like they did American brands importing products.”
Most Canadian brands entering the U.S. market are doing so by selling to American retailers like Nordstrom and Bloomingdale’s. Lindsay Nahmiache, CEO of the Toronto-based skin-care company Veriphy, just signed a deal to start selling in Ulta and Nordstrom. She said that her brand had just sent over a large shipment of product to its U.S. warehouses in January 2025, before tariffs went into effect in February, which should last the company at least a few more months.
The U.S. is a significantly larger market than Canada — with roughly 60 times more purchasing power by one estimate — and it didn’t take long for Veriphy’s U.S. sales to “eclipse” its Canadian sales. But Nahmiache said the American retailers have offered little assistance for brands dealing with tariffs.
Trump’s feuding with Canadian authorities over an Ontario political ad that criticized tariffs and making claims about turning the country into a “51st state” has angered many Canadians and soured the two countries’ relationship. But in material terms, such rhetoric is yet to have a major impact on business operations for Canadian companies.
A “Buy Canadian” movement has gained significant ground in Canada over the last year, with some reports showing that up to 70% of Canadian consumers are looking to increase their purchases from Canadian companies.
“We actually saw a boost in sales in Canada because people are looking to buy Canadian products,” Nahmiache said. “But right now, we’re trying to be flexible. If I listened to every threat and gave into every fear, I’d have shut down the business a long time ago.”
Other news to know
- After 18 years, Jenn Hyman, the founder and CEO of Rent the Runway, announced that she is stepping down from the company. She cited recent success — like RTR’s 20% revenue increase last quarter — as a sign that the company is on a good trajectory as she departs.
- EBay predictably rejected Gamestop’s long-shot bid to buy the company, calling the offer “neither credible nor attractive.”
- Tariff refunds have begun to go out, and the federal government has already issued over $35 billion in refunds to more than 80,000 applicants.
Glossy’s fashion coverage