In the final hours before the deadline for Canada to secure a trade agreement with the United States, numerous Canadian businesses are feeling anxious, anticipating a potential loss of up to half of their sales if new tariffs are imposed. These impending U.S. tariffs, scheduled to come into effect on Wednesday, would impact an additional $28 billion worth of Canadian goods, including electronics, dairy products, alcohol, and wood, on top of existing trade sanctions.
Negotiations are intensifying as Canadian officials may meet with U.S. Trade Representative Jamieson Greer before Prime Minister Mark Carney and President Donald Trump engage in discussions prior to the tariff deadline. The ultimate decision on any deal is expected to rest with President Trump.
For certain Canadian businesses, the proposed tariffs not only mean increased prices for American customers but also pose challenges in terms of border shipping costs. Todd Stafford, president of Northern Cables in Brockville, Ontario, expressed concerns as his company heavily relies on U.S. buyers for about half of its sales. If the tariffs are implemented, Stafford fears losing all U.S. business immediately.
The impact of these tariffs would extend beyond sales figures, potentially leading to layoffs and exacerbating existing economic challenges such as slowing construction activities and competition from lower-priced Chinese goods.
Despite the protective coverage of the Canada-U.S.-Mexico Agreement (CUSMA) shielding most cross-border trade, the new tariffs set to be enforced could affect around five percent of Canada’s overall trade with the U.S. A wide range of Canadian exports, including hockey equipment, select flowers, and antiques, would be affected.
The Canadian Federation of Independent Business (CFIB) highlighted the significant concerns among business owners, noting the potential dire consequences of losing half of their revenue. Business owners like Cindy Baldassi, who runs an Alberta-based jewelry company, are already taking proactive measures to brace for the impact of these tariffs.
The looming threat of tariffs has already started affecting businesses, with some reporting layoffs and reduced orders. Companies like Monterey Textiles have adapted their operations to mitigate the impact, while others in the textile industry have faced challenges due to the uncertainties surrounding the tariffs.
In Alberta, beekeepers like Lorne Prins are preparing for the potential fallout of the tariffs, with concerns over surplus honey affecting prices and the need for local support through initiatives like the Buy Canadian movement.
The uncertainty surrounding the outcome of the trade negotiations is causing widespread unease among Canadian businesses, with many hoping for a resolution that avoids the detrimental effects of the proposed tariffs.