Canadian businesses are commencing operations on Tuesday amidst 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 may experience minimal effects from the tariffs.
The new tariffs came into effect at 12:01 a.m. Tuesday, impacting nearly 700 American products with rates ranging from 15% to 50%. The affected items range 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 in response to the 50% tariffs imposed by U.S. President Donald Trump’s administration on Aug. 22 on various products valued at over $28 billion, including items like 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, expressed concerns that some members feel marginalized by the government in this trade dispute with the United States, particularly affecting smaller businesses disproportionately.
JS Furniture, a Manitoba-based home furnishings and appliance retailer, estimates that 60% of its sales by volume are derived from American goods. The company’s general manager, Brian Kyca, highlighted the impact on items like laminate-style bedroom suites, noting the varying tariff percentages on different furniture components.
Kyca mentioned the challenges in assessing the impact due to limited information from agencies like the Canada Border Services Agency. Despite planning to absorb the additional costs for now, JS Furniture is exploring negotiations with U.S. manufacturers to mitigate the impact on customers awaiting deliveries.
Colin Mang, an economics professor at McMaster University, noted that businesses across Canada are facing a delicate balance in dealing with the tariffs. He highlighted that retailers might absorb a significant portion of the tariff costs to minimize the impact on consumers, depending on the duration of the tariffs.
Bank of Canada Governor Tiff Macklem emphasized the potential economic impact of the tariffs, stating they would add costs for some businesses but are applied to a relatively narrow base. Kelly expressed concerns about the disproportionate burden on certain businesses due to the counter-tariffs.
The trade war between Canada and the U.S. has caused JS Furniture to pause its expansion plans and impacted its employees, especially sales staff reliant on commissions. Mang highlighted that the new tariffs aim to promote domestic alternatives to U.S. goods and may not significantly affect the daily lives of most Canadians.
Overall, the implementation of the new tariffs is expected to have limited impact on consumers’ day-to-day lives, with domestic market opportunities being a focus for Canadian companies to offset losses in the U.S. market.