Key facts
- US and Canadian trade talks collapsed, leading to reciprocal 50% tariffs.
- US tariffs impact Canadian wine, dairy, cement, clothing, and hockey equipment.
- Canada will impose tariffs on US steel, dairy, appliances, and electronics starting September 8.
- The new US tariffs affect about $20 billion of Canadian exports.
- Small businesses on both sides of the border fear significant financial losses and potential closures.
Businesses in Canada and the United States are facing significant uncertainty and potential financial hardship following the collapse of trade talks and the imposition of substantial tariffs by both nations. Cindy Baldassi, owner of Calgary-based jewellery company CindyLouWho2, anticipates losing at least half of her business as US sales, which constitute 75% of her revenue, are likely to be wiped out by a 50% tariff.
US President Donald Trump's tariffs, which went into effect on Saturday, target Canadian wine, dairy, cement, clothing, and hockey equipment. In response, Canadian Prime Minister Mark Carney has pledged retaliatory levies, set to begin on September 8, on US steel, dairy, appliances, and electronics. These measures come on top of existing tariffs on Canadian steel, aluminum, automobiles, and lumber.
Canadian companies are particularly exposed, with 70% of their exports going to the US. Lind Furniture, an Ontario-based company, experienced sales freezes when tariffs were previously threatened. Its general manager, Michael Saifer, expressed concern about the potential for severe damage, stating, "we may get killed."
Matteo Sgaramella, founder of Toronto-based menswear brand Outclass, highlighted the challenge of dealing with pre-paid orders. Retailers who ordered products in January now face the prospect of additional 50% tariffs upon arrival in September, potentially leading them to refuse shipments. Sgaramella noted that while larger businesses might adapt, small businesses are particularly vulnerable.
On the US side, businesses like Paloma Clothing in Portland, Oregon, are preparing for price increases on imported goods. Co-owners Mike Roach and Kim Osgood expect the retail price of their best-selling pillows to rise from $59 to between $86 and $90 due to tariffs, a significant jump for price-sensitive gift items. They plan to absorb the cost initially, hoping the issue resolves quickly.
Bill Easton, owner of Terre Rouge Wines in California, has been unable to ship wine to Canada for over a year due to a boycott and is incurring significant storage costs. Heather Seevers, owner of Northwest Yarns and Mercantile in Bellingham, Washington, has seen a 20% drop in Canadian customers and recently launched a fundraising initiative to stay afloat. She believes the new tariffs will deepen the rift between the two countries, taking years to repair.