Canadian businesses are commencing operations on Tuesday amid the implementation of the federal government’s new dollar-for-dollar tariffs on $28 billion worth of U.S. imports. While many owners are preparing for increased costs and supply-chain challenges, experts suggest that consumers might not feel a significant impact.
The newly imposed tariffs became effective at 12:01 a.m. Tuesday, targeting nearly 700 American products with rates ranging from 15 per cent to 50 per cent. The affected items span from essential commodities like steel and aluminum to household essentials such as toilet paper and specialized products like coin-operated arcade games.
These dollar-for-dollar tariffs are Canada’s response to the 50-per-cent levies imposed by U.S. President Donald Trump’s administration on Aug. 22, covering a range of products exceeding $28 billion, including plywood, cement, wine, and hockey sticks.
Dan Kelly, the president of the Canadian Federation of Independent Business (CFIB), representing over 100,000 small and medium-sized firms nationwide, voiced concerns over the escalating trade dispute. Kelly expressed that some members feel marginalized by the government’s actions in the ongoing trade war with the United States, particularly impacting smaller businesses across Canada.
JS Furniture, a Manitoba-based retailer of home furnishings and appliances with multiple locations, estimates that American goods constitute 60 per cent of their sales volume. General manager Brian Kyca highlighted that bedroom suites with laminate finishes are expected to be significantly affected by the new tariffs, with larger items facing a 50 per cent tariff and smaller components subject to a 25 per cent tariff.
Kyca expressed frustration over the lack of clear information from agencies like the Canada Border Services Agency regarding the potential impact. Despite this uncertainty, JS Furniture plans to absorb the increased costs and negotiate with manufacturers to mitigate the impact on customers awaiting deliveries.
Colin Mang, an economics professor at McMaster University, noted that businesses nationwide are navigating a delicate balance in responding to the tariffs. He highlighted that retailers might absorb most of the tariff costs to minimize the impact on consumers but emphasized that prolonged tariffs could significantly affect their profitability.
While concerns loom over the economic repercussions, Bank of Canada Governor Tiff Macklem mentioned that the tariffs are expected to affect a limited segment of businesses due to their narrow application. Despite the challenges posed by the trade war, the impact on the daily lives of most Canadians is projected to be minimal, with the tariffs primarily targeting U.S. goods for which domestic alternatives are readily available.