Derek Friesen, the owner of PhiBer Manufacturing Inc. in Manitoba, mentioned that the ongoing trade dispute between Canada and the U.S. had not impacted his business significantly, except for some products that were previously subjected to 10 per cent duties. However, the situation changed with the recent announcement of retaliatory Canadian tariffs on $27.6 billion worth of U.S. goods.
PhiBer Manufacturing Inc. produces agricultural equipment, including dash trailers used by large-scale farmers for crop maintenance. The company traditionally sourced frames for these trailers from Iowa. Effective September 8, these frames will be subject to new retaliatory tariffs, potentially leading to a considerable increase in costs for the company.
Friesen expressed concerns that the elevated costs could make the trailers, which represent a significant portion of his sales, economically unviable in the near future. While some businesses anticipate benefits from the countermeasures in terms of increased sales within Canada, others like Friesen fear the impact of higher costs on their operations.
The newly imposed Canadian tariffs, ranging from 15 to 50 per cent, will affect various U.S. products, including seafood, paper goods, furniture, apparel, tools, and motorcycles. The targeted approach taken by the Canadian government aimed to minimize the impact on domestic consumers and industries while putting pressure on American businesses.
Economist Bradley Saunders noted that the tariffs would have a modest effect on inflation and that government support measures could partially offset the negative impact on business growth. Notably, the counter-tariffs primarily target industrial supplies and materials used in manufacturing processes.
While some businesses, like Danby Appliances in Ontario, may benefit from the tariffs by gaining a competitive edge in the market, others are concerned about the overall implications of the trade war. Simon Gaudreault, the chief economist at the Canadian Federation of Independent Business, emphasized the challenges faced by Canadian businesses due to the trade tensions and expressed skepticism about the effectiveness of support programs.
Despite the government’s $7.5 billion support package for businesses affected by the trade war, concerns remain about the adequacy of these measures. Gaudreault highlighted the potential limitations of the support programs, echoing the sentiment that a resolution to the trade war is ultimately needed to alleviate the strain on businesses.
In conclusion, the impact of the retaliatory tariffs on Canadian businesses remains a topic of concern, with uncertainties surrounding the effectiveness of support initiatives and the broader implications of the ongoing trade dispute.