As the deadline looms for Canada to finalize a trade agreement with the United States, a significant number of Canadian enterprises are anxious, anticipating a potential loss of up to half of their sales if the new tariffs are implemented. The impending U.S. tariffs, scheduled to be enforced on Wednesday, would be imposed on top of existing trade sanctions, affecting a variety of Canadian goods such as electronics, dairy products, alcohol, and timber, amounting to approximately $28 billion in value.
For certain Canadian businesses, the impact of these tariffs would not only result in increased prices for their American customers but could render their products too expensive to export across the border, leading to a complete halt in sales, according to some business owners.
Todd Stafford, the president of Northern Cables based in Brockville, Ontario, expressed concern as his company heavily relies on U.S. buyers for half of its sales. Specializing in the production of copper and aluminum power cables for commercial and industrial purposes, Stafford mentioned that a 50% tariff level would immediately eliminate all their U.S. business, emphasizing the critical importance of a favorable resolution or a potential time extension.
Despite managing to avoid layoffs for the past 26 years and maintaining a workforce of 320 employees in Brockville, Stafford fears that the tariffs could exacerbate existing challenges like the slowdown in condo construction and increased competition from cheaper Chinese-made products, potentially leading to a substantial reduction in their workforce.
Impact on Canadian Businesses Under CUSMA Exemption
Since the beginning of his second term in January 2025, U.S. President Donald Trump has targeted vital sectors of the Canadian economy, including auto parts, lumber, steel, and aluminum. However, the majority of cross-border trade has been shielded under the Canada-U.S.-Mexico Agreement (CUSMA), signed by Trump in 2020, significantly mitigating the adverse effects of the trade conflict on Canada’s economy.
Nevertheless, the impending tariffs set to be enforced would affect around 5% of Canada’s total trade with the U.S., impacting various Canadian exports such as hockey equipment, specific flowers, and antiques, while key sectors like energy, potash, and critical minerals are expected to remain unaffected.
Jasmin Guénette, the vice-president of national affairs at the Canadian Federation of Independent Business (CFIB), emphasized the profound concerns among business owners facing the potential loss of 50% of their revenue due to these tariffs, highlighting the protective role that CUSMA has played for many sectors and businesses.
Cindy Baldassi, the owner of CindyLouWho2, a Calgary-based handmade jewelry company, expressed apprehension over the possibility of losing half of her business due to the tariffs, prompting her to cease U.S. shipping on her platforms and adjust prices accordingly. The absence of CUSMA compliance for her products this time poses a significant challenge compared to earlier rounds of tariffs.
While Baldassi has increased her focus on the domestic market, a substantial portion of her customer base from her Etsy shop comprises Americans, underscoring the limitations faced by small businesses in terms of marketing outreach. Guénette emphasized the increasing trend among Canadian businesses to explore non-U.S. markets, reflecting a growing distrust towards the U.S. as a reliable trading partner.
Pre-existing Impact of Tariff Threat on Businesses
Several business leaders have noted that the mere threat of new tariffs has already had repercussions on operations. Randy Williams, the director of sales and marketing at Monterey Textiles, mentioned that some textile makers have faced challenges, with layoffs and reduced orders as a result of the tariff uncertainty.
Similarly, beekeeper Lorne Prins from Gull Lake Honey in Alberta highlighted the rush among honey producers to export to the U.S. ahead of the deadline, anticipating a surplus of honey in Canada if new tariffs hinder sales to the U.S., affecting local prices significantly.
If the tariffs are enforced, Prins hopes Canadian consumers will support local businesses through initiatives like the Buy Canadian movement to alleviate the impact on businesses needing assistance.