Derek Friesen, the owner of an agricultural equipment manufacturing company in Manitoba, had managed to avoid the impacts of the Canada-U.S. trade war on his business until now. However, with the recent announcement of Canadian retaliatory tariffs on $27.6 billion worth of U.S. goods, his company, PhiBer Manufacturing Inc., is set to face new challenges. The company, known for its agriculture equipment such as dash trailers used by large-scale farmers, imports frames for these machines from Iowa. Starting on Sept. 8, these frames will be subjected to additional tariffs, potentially leading to a significant increase in production costs.
Friesen expressed concerns about the potential rise in prices due to the tariffs, emphasizing the strain it would put on farms already facing financial pressures. The increased costs could render the production and sale of their trailers, which account for 70% of their sales, economically unviable in the near future.
The newly imposed tariffs by Canada cover a range of products from the U.S., including seafood, paper goods, furniture, apparel, tools, and motorcycles. According to economist Bradley Saunders, the targeted approach taken by the Canadian government in selecting these items aims to hurt American businesses while minimizing the impact on Canadian consumers and industries.
While some businesses may benefit from the tariffs, others like Danby Appliances foresee challenges ahead. The owner, Jim Estill, mentioned that while some costs would rise due to the tariffs, they could potentially gain a competitive edge in the Canadian market, particularly for products like refrigerators. However, Estill acknowledged that the overall impact of the counter-tariffs might outweigh the benefits, especially if consumers delay major purchases due to the trade tensions.
Simon Gaudreault, the chief economist at the Canadian Federation of Independent Business (CFIB), echoed concerns about the repercussions of retaliatory tariffs on Canadian businesses. He highlighted the larger threat posed to businesses that import components from the U.S. compared to those exporting finished goods. Despite government support measures introduced to assist affected businesses, Gaudreault remains skeptical about their effectiveness, given the challenges faced by small businesses in accessing such support.
The prevailing sentiment among business owners like Friesen is a call for a resolution to the ongoing trade war, emphasizing the need for a swift and amicable conclusion to mitigate further economic disruptions.
