Green procurement and tariff resilience: Strategies from Canadian auto suppliers for U.S. automakers

The 2025 Canada-U.S. automotive trade dispute has proved to be one of the most serious supply chain interruptions in recent history. Since 25% vehicle and auto-parts tariffs were introduced in April 2025, small-scale auto parts (SSAP) suppliers from Canada, who are key partners to major U.S.-based automakers, are facing unprecedented challenges (Department of Finance Canada, 2025). Yet my research shows that the very practices these firms adopted for green procurement have also become their strongest resilience strategy under tariff pressure.

Green procurement, which integrates environmental criteria into purchasing and supplier selection, has built competencies in urgency, coalition formation, communication, and empowerment (United Nations Environment Programme, 2018). This approach has fostered the development of organizational competencies, including urgency, coalition formation, communication, and empowerment. Drawing on research of Canadian SSAPs, which make up more than 70% of the country’s auto parts sector (Innovation, Science and Economic Development Canada, 2023), four insights are identified for supply chain leaders to facilitate adaptability during periods of trade instability.

The Green Procurement Foundation

Green purchasing, as incorporating environmental criteria into buying, supplier selection and contracting management, has become critical to automotive industry competitiveness. My work investigated how leaders at SSAP implemented Kotter’s (1996) Eight-Step Change Management Model to embrace these practices and revealed environmental initiatives to develop organizational capacities beyond sustainability.

The time context is particularly relevant. By July 2025, Canadian car exports faced tariffs of over US$380 million, with vehicles accounting for US$311 million and car parts for US$72 million, marking a sharp increase as U.S. tariffs became fully operational (Anderson Economic Group, 2025). At the same time, Canada imposed a 25% duty on non-CUSMA U.S. vehicles (Department of Finance Canada, 2025). Amidst this volatile environment, enhanced adaptive capacities developed through green procurement have become key to sustainability. Since most Canadian SSAPs supply major U.S. automakers, their responses to tariffs hold insightful value for enhancing resilience across entire North American supply chains.

Lesson 1: Creating urgency that sustains momentum

Traditional models view urgency as an initial motivator (Kotter, 1996), but my research shows that sustained urgency became a competitive advantage during prolonged uncertainty.

“With the 2035 deadline looming, we have no choice but to act swiftly,” explained one procurement leader in our study. By positioning compliance and competitive advantage side by side, leaders constructed a two-pressure paradigm to maintain organizational focus. As a participant described it, “Leaders set the tone. If they communicate urgency effectively, it resonates throughout the organization.”

In a tariff era, trade disruption must be seen not as a short-term crisis but as a lasting condition requiring continual adjustment. Leaders who are adept at maintaining sustained urgency resist the typical trajectory of initial mobilization and steady drifting back to previous habits.

Practical Application: Use compliance deadlines, cost projections, and customer expectations as ongoing prompts rather than one-time motivators. Create salient dashboards that track environmental and financial signals, thereby sustaining organizational recognition of changing situations.

Lesson 2: Building coalitions that evolve

Typical models stress early coalition building (Kotter, 1996). My research indicated that effective coalitions are dynamic networks that evolve with challenges.

SSAP first developed cross-functional work teams and later added legal and compliance expertise. This flexibility was crucial when tariffs broke longstanding supply arrangements. Agile firms quickly brought in trade experts, logistics partners, and suppliers to support decisions. As one leader noted, “It is critical to bring different perspectives to the table,” emphasizing that diversity of expertise is preferable to hierarchical issues.

Practical Application: Establish governance structures as fluctuating networks instead of static committees. Proactively solicit possible members from legal, financial, and external cooperators before they are necessary and change participants frequently to allow diverse viewpoints to be represented.

Lesson 3: Sustaining transparent communication

Communication is generally defined as communicating a vision (Kotter, 1996). My research found that leaders at SSAP went one step further and developed templates blending transparency with clear business results, necessary during tariff negotiations and interactions with supply houses.

Leaders used dashboards, newsletters, and short videos to share progress and early wins. As one participant said, “An internal dashboard let everyone see progress and contributions.” As supply trends evolved with the effect of tariffs, these combined systems enabled firms to rapidly communicate cost implications, alternate sourcing suggestions, and strategic shifts through the organization and supply chain.

Practical Application: Develop real-time communications tools to integrate data visualization with narrative construction. Educate managers to communicate technical specifications as well as business consequences. Develop two-way feedback loops to ensure frontline voices with observations regarding shifting markets are carried to leadership expeditiously.

Lesson 4: Empowering teams through structure

Most change models theorize change as empowering by granting power to individuals. My work revealed that leaders at SSAP performed better by integrating power with reengineered procedures, state-of-the-art templates, and defined decision-making paradigms.

“You have to split the task into different phases,” explained one manager, describing how formalized empowerment successfully decentralized decisions yet ensured coordination. Leaders integrated tools, ownership, and flexibility to enable departments to adjust. Structured empowerment prepares firms to react quickly while staying aligned, vital in volatile trade environments.

Practical Application: Integrate empowerment into working procedures. Redesign procurement templates to incorporate sustainability and risk-based evaluation criteria. Make use of decision matrices when performing assessments at the front end with suppliers. Reward and celebrate sustainability outcomes and adaptation measures to marketplace volatility.

The resilience dividend

The four tactics of urgency, coalitions, communication, and empowerment, which create a “resilience dividend.” Companies that have matured these capabilities to pursue environmental goals have also ended up being better prepared for trade disruptions, supply chain dynamism fluctuations, and shifts in regulatory environments.

Based on Kotter’s (1996) framework, my research indicated that initial moves like urgency, coalitions, communications, and empowering set the stage for subsequent efforts like vision-setting, quick wins, and institutionalization. The recent Canada–U.S. trade dispute shows this pattern at work: companies that have fashioned agility through green procurement are positioning themselves better than those trained solely to pare costs. The dividend ahead is broader than trade: as the sector shifts to electrification and sustainable production, environmental leadership combined with operational resilience will continue to be a permanent source of competitiveness advantage.

Looking ahead

The lines between environmental and operational excellence are growing fainter. Competencies foundational to sustainability create resilience in volatile markets.

My research shows that Kotter’s (1996) framework works more as a flexible guide than a strict sequence. Leaders sustained urgency and coalitions throughout the process, often developing a vision only after early actions had built credibility. This confirms that change is cyclical, not purely linear. For supply chain leaders, the message is clear: green procurement ought to be viewed as something more than a procedural or environmental initiative and equally as a resilience-enhancing strategy. Canada’s experience shows that integrating environmental practices into procurement builds the capabilities needed to manage tariffs, shifting trade flows, and evolving regulations. As global trade and sustainability pressures intensify, firms that recognize the interdependence of sustainability and resilience will be best positioned to compete. The lessons from Canadian suppliers under tariff pressure offer a roadmap: start with green procurement, build agility, and extend those capabilities into organizational resilience.

Note: This article is based on research with Canadian small-scale auto parts manufacturers conducted between May and August 2024, prior to the current trade dispute. The findings remain relevant as trade tensions continue to reshape North American automotive supply chains.

About the Author

Corrine Chen is an educator, researcher, and former industry executive with over a decade of hands-on experience in supply chain management, procurement, and innovation. She teaches supply chain management courses at the University of Nebraska Omaha. Corrine’s work bridges academia and practice, with published research, applied projects, and a passion for empowering the next generation of supply chain professionals. She can be reached at [email protected].

References

Anderson Economic Group. (2025, September 10). Tariffs hit North American automakers with $1.389 billion in duties from Canada and Mexico in July. Anderson Economic Group. https://www.andersoneconomicgroup.com/tariffs-hit-north-american-automakers-with-1-389-billion-in-duties-from-canada-and-mexico-in-july/

Department of Finance Canada. (2025, April 7). List of vehicle products from the United States subject to 25 per cent tariffs effective April 9, 2025. Government of Canada. https://www.canada.ca/en/department-finance/news/2025/04/list-of-vehicle-products-from-the-united-states-subject-to-25-per-cent-tariffs-effective-april-9-2025.html

Innovation, Science and Economic Development Canada. (2023). Canadian industry statistics: Motor vehicle parts manufacturing (NAICS 3363). Government of Canada.

Kotter, J. P. (1996). Leading change. Harvard Business Review Press.

United Nations Environment Programme. (2018). Green procurement guidelines.

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