Canadian businesses and industry leaders are preparing for the impact of new 50 percent U.S. tariffs and hoping for swift domestic assistance. Prime Minister Mark Carney summoned his negotiation team back to Ottawa when trade discussions collapsed due to what he deemed as “unreasonable” demands from the U.S. With negotiations halted, U.S. President Donald Trump’s threatened 50 percent tariffs are now in effect, covering various Canadian goods such as wood furniture, cement, plywood, and wine.
Ron Kubek, the owner of Lightning Rock Winery in British Columbia, managed to deliver a $20,000 order to Washington state before the tariffs took effect. However, he mentioned that it would be his final shipment across the border due to the new tariffs. Kathleen Chapman, the president of aVenco, a company producing parchment baking paper in Bowmanville, Ontario, expects a significant impact on her business as a substantial portion of her products are exported to the U.S. The uncertainty created by the trade war has hindered her business’s future planning and customer interactions.
The extensive tariff coverage affects around $28 billion worth of Canadian exports, approximately five percent of goods sent to the U.S. While the overall economic impact might be limited, specific sectors, particularly manufacturers in Quebec and Ontario producing plastic, chemicals, cement, and concrete, are anticipated to bear the brunt of the tariffs.
Dennis Darby, the president of Canadian Manufacturers and Exporters (CME), expressed concerns over the new duties exacerbating the challenges faced by manufacturers following previous tariffs on steel, aluminum, lumber, and autos. The potential job losses and business setbacks are alarming, with exports to the U.S. already declining by about 15 percent in the past year.
According to economist Trevor Tombe, approximately 87,000 jobs could be at risk nationwide due to the new tariffs, affecting industries like agriculture, textile, electronics, furniture, and plastics manufacturing. He also highlighted the indirect impact on sectors like warehousing and trucking, which could alter the geographical distribution of job losses.
Small firms, like Lightning Rock Winery, fear the repercussions of retaliatory Canadian tariffs, which could escalate input costs and further strain businesses. The hope lies in government support and the removal of interprovincial trade barriers to aid affected businesses. The recent commitment by nine premiers to facilitate direct-to-consumer alcohol sales is seen as a positive move for businesses seeking alternatives to offset lost U.S. sales.
Dan Kelly from the Canadian Federation of Independent Business (CFIB) emphasized the need for effective support programs tailored to assist small businesses, unlike past initiatives that fell short. With the new tariffs posing a significant threat to many businesses, swift and substantial assistance from the government is crucial to mitigate the short-term impacts.