With the looming deadline for Canada to secure a trade agreement with the United States, many Canadian businesses are feeling anxious, anticipating a potential loss of up to half of their sales if new tariffs are imposed. The upcoming wave of U.S. tariffs is scheduled to come into effect on Wednesday unless a last-minute resolution is reached. These tariffs would be in addition to existing U.S. trade restrictions, imposing extra duties on $28 billion worth of Canadian goods spanning electronics, dairy, alcohol, wood, and more.
Negotiations are intensifying as the deadline approaches. There is a possibility of Canadian officials meeting with U.S. Trade Representative Jamieson Greer before discussions between Prime Minister Mark Carney and President Donald Trump leading up to the tariff deadline. The final decision on any deal lies with President Trump, as emphasized by America’s chief trade negotiator.
For some Canadian companies, the proposed new tariffs pose a significant threat beyond just increasing prices for American customers. They fear that the cost of shipping goods across the border would become unsustainable. Todd Stafford, the president of Northern Cables based in Brockville, Ontario, highlighted that his company heavily relies on U.S. buyers for half of its sales, specializing in copper and aluminum power cables for commercial and industrial purposes.
Stafford expressed concerns that if the new tariffs are enforced, their U.S. business could suffer an immediate loss, potentially hindering border crossings for their shipments. The company, which employs 320 individuals in Brockville, has managed to avoid layoffs for over two decades. Stafford worries that the tariffs could exacerbate existing challenges such as the slowdown in condo construction and competition from cheaper Chinese products.
Despite the protective shield of the Canada-U.S.-Mexico Agreement (CUSMA) covering most cross-border trade, the impending tariffs could impact around five percent of Canada’s overall trade with the U.S. The extensive list of affected Canadian exports includes items like hockey sticks, select flowers, and antiques. Energy, potash, and critical minerals are expected to remain unaffected by the new tariffs.
Business owners, including Cindy Baldassi who operates a Calgary-based jewelry company, are bracing for potential losses. Baldassi has already halted shipments to the U.S. on her platforms and is preparing to increase prices on her products. The absence of CUSMA compliance for this round of tariffs has left her business vulnerable. Moreover, she is concerned about the heavy reliance on American customers, lacking the resources to expand marketing efforts beyond the U.S.
Jasmin Guénette from the Canadian Federation of Independent Business (CFIB) echoed the widespread apprehension among business owners, emphasizing the significant impact of potentially losing half of their revenue. The uncertainty surrounding the tariffs has prompted businesses to explore alternative markets outside the U.S., as trust in the reliability of the U.S. as a trading partner diminishes.
Even before the new tariffs are implemented, some businesses have already felt the repercussions. Randy Williams from Monterey Textiles noted the adverse effects on the Canadian textile industry, with layoffs occurring and orders dwindling due to the tariff threat. Similarly, beekeepers like Lorne Prins in Alberta are rushing to export honey to the U.S. ahead of the deadline to avoid potential surplus issues that could impact local prices.
The evolving trade situation between Canada and the U.S. underscores the challenges faced by businesses across various sectors, emphasizing the need for swift resolutions to mitigate economic disruptions.