Derek Friesen, the owner of PhiBer Manufacturing Inc. in Manitoba, has been relatively unaffected by the Canada-U.S. trade tensions, except for a few items hit by previous 10% tariffs. However, the recent announcement of Canadian retaliatory tariffs on $27.6 billion worth of U.S. goods has put his business in the spotlight.
PhiBer Manufacturing Inc. specializes in agricultural equipment, specifically dash trailers essential for crop maintenance. These trailers rely on frames imported from Iowa, which will now face additional tariffs starting from September 8. Friesen is concerned that the increased costs will significantly inflate prices, making it challenging for farms to absorb the impact.
With dash trailers constituting a substantial portion of his sales, Friesen anticipates that the economic feasibility of these products may diminish rapidly. While some business owners fear the repercussions of the retaliatory tariffs, others see potential opportunities to boost domestic sales amidst the escalating trade tensions.
The new tariffs imposed by Canada range from 15% to 50% on various U.S. products, including seafood, paper goods, furniture, apparel, tools, and motorcycles. Bradley Saunders, an economist, notes that the targeted approach taken by the Canadian government aims to minimize the impact on consumers while hurting American businesses. He believes that the overall effect on inflation will be marginal, with government support programs expected to offset a portion of the business growth decline.
For companies like Danby Appliances in Guelph, Ontario, the tariffs could offer some benefits. Owner Jim Estill mentions that while certain parts may face price hikes due to the tariffs, the increased costs are manageable. In fact, the tariffs could make Canadian-made products more competitive in the market compared to U.S. imports, potentially increasing market share for domestic businesses.
Despite the potential advantages for some businesses, the overall impact of the counter-tariffs remains a concern. Simon Gaudreault, chief economist at the Canadian Federation of Independent Business (CFIB), emphasizes that the retaliatory measures could pose significant challenges for Canadian businesses, especially those reliant on U.S. imports. The CFIB data underscores the vulnerability of businesses to the ongoing trade tensions and the need for substantial support to weather the storm.
While the government has announced a $7.5 billion support package to assist businesses and workers affected by the trade war, Gaudreault remains skeptical about the effectiveness of these measures. He points out that past programs had limited uptake due to restrictive criteria, and there are concerns that many businesses may not benefit from the current support initiatives.
In conclusion, Friesen echoes the sentiment of many business owners, emphasizing the urgent need for a resolution to the trade conflict to alleviate the strain on businesses and restore stability to the market.