With the clock ticking for Canada to finalize a trade agreement with the United States, many Canadian businesses are feeling anxious, anticipating a potential significant drop in sales if the new tariffs are imposed. The upcoming round of U.S. tariffs scheduled for Wednesday would impact a wide range of Canadian products, such as electronics, dairy, alcohol, and wood, totaling $28 billion in trade value.
Some Canadian businesses fear that not only would their products become more costly for American consumers, but the elevated prices could render their products unviable for export to the U.S. Todd Stafford, the president of Northern Cables in Brockville, Ontario, highlighted the importance of U.S. buyers who contribute to about half of their sales. The company specializes in manufacturing copper and aluminum power cables for industrial and commercial applications.
Stafford expressed concerns that a 50% tariff would force their company to lose all U.S. business immediately, potentially halting all cross-border shipments. He emphasized the impact the tariffs could have on their 320 employees and the challenges they might face, including a slowdown in condo construction and increased competition from cheaper Chinese alternatives.
The Shield of CUSMA, an exemption mechanism under the Canada-U.S.-Mexico Agreement, has shielded a significant portion of cross-border trade from tariffs since its inception in 2020. However, the impending tariffs set to take effect would affect approximately 5% of Canada’s overall trade with the U.S., impacting various exports, including hockey sticks, certain flowers, and antiques.
Business owners, like Cindy Baldassi of CindyLouWho2, a Calgary-based handmade jewelry company, are worried about potential losses, with Baldassi already taking steps to adjust her pricing strategy in anticipation of the tariffs. The inability to prove CUSMA compliance this time poses a serious challenge for her business.
Amidst the uncertainty, Canadian businesses are exploring alternative markets beyond the U.S., as concerns grow over the reliability of the U.S. as a trading partner. Even without the tariffs taking effect yet, some businesses have already experienced repercussions, with layoffs, decreased orders, and potential shifts in customer preferences.
In Alberta, beekeeper Lorne Prins from Gull Lake Honey mentioned the rush among producers to ship honey to the U.S. before the tariff deadline to mitigate potential losses. The looming tariffs could create a surplus of honey in Canada, affecting local prices and necessitating support for Canadian businesses through initiatives like the Buy Canadian movement.
