As the clock ticks down for Canada to finalize a trade agreement with the United States, many Canadian businesses are feeling anxious, anticipating a significant drop in sales if new tariffs are imposed. The upcoming round of U.S. tariffs is scheduled to go into effect on Wednesday, potentially affecting $28 billion worth of Canadian products, including electronics, dairy, alcohol, and wood.
The negotiations are reaching a critical stage, with Canadian officials likely to meet with U.S. Trade Representative Jamieson Greer before Prime Minister Mark Carney and President Donald Trump discuss the situation. The final decision rests with Trump, emphasizing his pivotal role in any potential deal.
Concerns are mounting among Canadian businesses, as some fear that the proposed tariffs could not only increase costs for American customers but also render cross-border shipping economically unviable. Todd Stafford, the president of Northern Cables based in Brockville, Ontario, relies on U.S. buyers for half of the company’s sales. Should the tariffs be implemented, the business could lose its entire U.S. market overnight.
Despite hopes for a resolution or an extension, the looming tariffs pose a significant threat to Northern Cables and its 320 employees in Brockville. The impact could exacerbate existing challenges, such as a slowdown in condo construction and competition from cheaper Chinese products.
Implications Beyond CUSMA Protection
While the Canada-U.S.-Mexico Agreement (CUSMA) has shielded many sectors from trade disputes, the new tariffs set to come into force would affect approximately five percent of Canada’s trade with the U.S. Various Canadian exports, including hockey sticks, flowers, and antiques, are among the items on the list.
Notably, energy, potash, and critical minerals will remain exempt from the tariffs. However, the impending changes have left business owners anxious about their revenue streams, as the impact could be severe without the protective cover of CUSMA.
One such business owner, Cindy Baldassi of CindyLouWho2 in Calgary, fears losing half of her business due to the tariffs. Having already suspended U.S. shipping on her platforms, Baldassi faces the challenge of adjusting prices to mitigate the impact. Unlike previous rounds, proving CUSMA compliance may no longer shield her products from the new levies.
As the uncertainty looms, businesses like Monterey Textiles have already felt the effects of the tariff threats. Randy Williams, the company’s director of sales and marketing, notes the disruption in operations and the potential loss of U.S. customers seeking alternative suppliers. The looming tariffs have already triggered layoffs and reduced orders, affecting businesses even before implementation.
Similarly, beekeepers in Alberta, including Lorne Prins of Gull Lake Honey, are bracing for the tariffs by rushing shipments to the U.S. to beat the deadline. The tariffs could lead to an oversupply of honey in Canada, impacting local prices and necessitating support for Canadian businesses through initiatives like the Buy Canadian movement.
