Beyond tariffs: compliance implications of shifting U.S. trade relations Beyond tariffs: compliance implications of shifting U.S. trade relations

Canada’s economic crime enforcement and trade policies in 2025 were largely influenced by the evolving relationship with the U.S. The dynamic nature of tariffs and other measures introduced by both the Canadian and U.S. governments creates significant uncertainty, administrative burdens and compliance risks for businesses. Simultaneously, U.S. authorities appear to be recalibrating their enforcement priorities with a renewed focus on foreign entities and the protection of American interests.

This shifting environment creates unique compliance challenges that Canadian businesses will need to navigate in the coming year.

U.S. enforcement directed at Canadian companies

Enforcement against foreign entities is expected to continue to take centre stage for U.S. authorities in 2026, with a specific focus on prioritizing U.S. economic interests.

This prioritization is outlined in the June 9, 2025, guidelines released in relation to the Department of Justice’s (DOJ) criminal investigation and enforcement of the Foreign Corrupt Practices Act (FCPA).

The same recalibration is also featured in the DOJ’s May 12, 2025, release of its White-Collar Enforcement Plan. The Plan prioritizes investigation and prosecution of crimes involving trade and customs fraud, fraud that victimizes U.S. investors, sanctions, complex money laundering, cartels and transnational criminal organizations, among other specifically identified “high-impact areas.” At the same time, it focuses on “minimizing unnecessary enforcement burdens on American enterprise.” The guidance follows President Trump’s earlier “pause” to FCPA enforcement to, among other things, review existing enforcement actions and to “prioritize … American economic competitiveness with respect to other nations,” as we have previously written.

The new guidelines make clear the U.S. intention to focus enforcement efforts on foreign companies and to advance U.S. economic interests. Focus is directed to sectors deemed to implicate U.S. national security, including defence, intelligence and infrastructure, and to high-risk jurisdictions for cartels and transnational criminal organizations. Canadian businesses —particularly those operating internationally or in industries targeted by executive orders — should continue to expect heightened scrutiny from U.S. authorities.

Focus on cross-border anti-money laundering

Some of the stated policy reasons underlying the current trade dispute between the U.S. and Canada have brought renewed attention to money laundering concerns in Canada.

Canada has historically been criticized for perceived weaknesses in its anti-money laundering and anti-terrorist financing regime, as we have previously written. Measures previously adopted in respect of these issues are set out in the federal government’s Anti-Money Laundering and Anti-Terrorist Financing Regime Strategy 2023–2026 [PDF], as we wrote about in our 2024 Osler Legal Outlook article.

President Trump’s February 1, 2025, Executive Order implementing initial tariffs brought renewed focus to this issue. The measure referenced a January 23, 2025, operational alert [PDF] from the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) reporting on the laundering of proceeds of illicit synthetic opioids. In that alert, FINTRAC reported that “several domestic groups are suspected of playing an increasing role in the fentanyl market in Canada, with the majority operating in British Columbia as producers and distributors and with the majority of fentanyl precursor shipments being destined for that province.” These policy considerations are increasingly bringing attention not only to border security measures but also to issues related to money laundering activities. The result is increased scrutiny of financial transactions. We discuss the broader effects of U.S. tariffs and trade policy in our Osler Legal Outlook trade article.

The U.S. measures have brought renewed attention to these issues in Canada. This focus is evidenced in a number of ongoing legislative and other developments. A new Integrated Money Laundering Intelligence Partnership (IMLIP) was first convened on February 19, 2025. The IMLIP included RCMP Federal Policing program officials alongside the chief anti-money laundering officers of major Canadian financial institutions. The purpose of the IMLIP is to support the sharing of money laundering and organized crime information between Canada’s big banks and law enforcement.

Amendments to the Proceeds of Crime (Money Laundering) and Terrorist Financing Act and its regulations came into force in April 2025. Among other things, these changes create a new regime administered by the Canada Border Services Agency (CBSA). The CBSA has been empowered to facilitate the reporting, search and seizure of goods being imported and exported in and out of Canada to identify connections to proceeds of crime, money laundering, terrorist financing and sanctions evasion. The new measures permit the CBSA to declare whether goods are related to money laundering or sanction evasion. Also introduced are new record-keeping requirements and seizure and forfeiture powers, as well as administrative monetary penalties for non-compliance, as we wrote about in our 2024 Osler Legal Outlook article.

Finally, a new “Canada-U.S. Joint Strike Force” was announced in February 2025, following the Executive Order imposing the initial tariffs. The new task force is mandated to fight against organized crime, fentanyl smuggling and money laundering.

Against this backdrop, Canada is about to undergo a Financial Action Task Force (FATF) mutual evaluation in 2025/2026. The evaluation aims to assess FATF’s actions to tackle money laundering and terrorist financing, as well as its implementation of recommendations from the last mutual evaluation in 2016.

While certain of the policy purposes of such measures have related to cross-border illicit drugs amidst the Canada-U.S. trade dispute, the measures implemented in response are having — and will have — regulatory implications for businesses generally. Money laundering has been at the forefront of Canadian compliance measures in recent years. The Canada-U.S. trade dispute has had the effect of bringing even further focus to this issue.

Businesses should anticipate that money laundering will continue to be at the heart of compliance and enforcement efforts in the coming year, especially with respect to cross-border transactions and trade. Additional discussion of AML developments can also be found in this Osler Legal Outlook article.

Compliance risks from disrupted supply chains

The U.S. and Canadian tariffs have forced many businesses to revisit their supply chains. These businesses have been compelled to source from other jurisdictions goods and services they may historically have obtained from the U.S. While working with new partners may make economic sense, it can involve significant risk. Appropriate “know your counterparty” and supply chain compliance measures must be taken to ensure new business partners are doing business ethically.

Among other things, doing business with unfamiliar parties can increase risks associated with sanctions, money laundering, fraud, corruption and modern slavery. As businesses seek to diversify their supply chains, it is important to ensure they undertake robust diligence into any new counterparties, with a focus on achieving compliance throughout their supply chains. Failure to do so could have material commercial downsides, in addition to criminal consequences.

Companies also face increased domestic scrutiny following the implementation of reporting obligations under Canada’s Fighting Against Forced Labour and Child Labour in Supply Chains Act.  Companies will continue to be required to disclose information about their risk identification and due diligence processes in 2026.

Preparing for further change

As long as these disruptions persist — or new ones arise — businesses must continue to prepare for uncertainty and maintain robust compliance programs to mitigate legal, reputational and financial risks.

To weather whatever 2026 has in store, Canadian businesses should adopt a proactive compliance posture. Best practices include implementing integrated trade compliance programs. It is essential to maintain real-time, automatic sanctions monitoring systems and to conduct regular supplier audits. Businesses also should implement supplier transparency measures. It will be critical to ensure that internal policies reflect expectations of all applicable jurisdictions.