Canadian businesses and industry leaders are preparing for the full impact of new 50% U.S. tariffs, hoping for swift domestic assistance. Prime Minister Mark Carney summoned his negotiation team back to Ottawa after trade discussions collapsed due to what he termed “unreasonable” demands from the U.S.
With negotiators no longer engaged, U.S. President Donald Trump’s threatened 50% tariffs are now in effect, covering a variety of Canadian goods such as wood furniture, cement, plywood, and wine. Ron Kubek, the owner of Lightning Rock Winery in British Columbia, managed to deliver a $20,000 order to Washington state just before the tariffs took effect.
Kubek expressed that this shipment will be his last to the U.S. for the time being due to the new tariffs. Meanwhile, Kathleen Chapman, president of aVenco, a company manufacturing parchment baking paper in Bowmanville, Ontario, anticipates a significant impact on her business as a substantial portion of her products are exported to the U.S.
The newly implemented tariffs encompass around $28 billion worth of Canadian exports, affecting approximately 5% of products shipped to the U.S. While the broader economy may see a relatively small impact, specific sectors, particularly manufacturers in Quebec and Ontario producing plastic, chemicals, cement, and concrete, are expected to bear the brunt of the tariffs.
According to Dennis Darby, president of Canadian Manufacturers and Exporters (CME), manufacturers face a challenging situation without negotiators at the table, as they are now dealing with the repercussions of the new duties on top of existing sectoral tariffs. The potential job losses and business impacts are a growing concern for Canadian manufacturers.
University of Calgary economist Trevor Tombe estimates that approximately 87,000 jobs could be at risk across various industries due to the new tariffs. The impact is expected to extend beyond sectors directly targeted by the tariffs, potentially affecting industries like warehousing and trucking.
Small businesses, like Lightning Rock Winery, are also feeling the pressure, especially with the looming threat of Canada’s retaliatory tariffs. The prospect of increased input costs due to tariffs on materials sourced from the U.S. is a major concern for these businesses.
While the government has pledged support for affected businesses, concerns remain about the effectiveness of past relief programs. Dan Kelly, president of the Canadian Federation of Independent Business (CFIB), emphasizes the need for new support initiatives tailored to the challenges faced by small businesses in light of the escalating trade tensions.