Derek Friesen, the owner of PhiBer Manufacturing Inc. in Manitoba, had largely avoided the impact of the Canada-U.S. trade conflict on his agricultural equipment company, with only a few products affected by previous 10 per cent tariffs. However, the situation changed with the recent announcement of retaliatory Canadian tariffs on $27.6 billion worth of U.S. goods.
The company specializes in manufacturing agricultural equipment, such as dash trailers used by large-scale farmers for crop maintenance. While PhiBer Manufacturing has been importing frames for these trailers from Iowa, the imposition of new retaliatory tariffs on these frames starting September 8 will lead to increased costs.
Friesen expressed concern that the increased costs resulting from the tariffs would significantly raise the prices of these trailers, making them potentially unsustainable for both buyers and sellers.
He anticipated that the dash trailers, which account for around 70 per cent of his sales, might become financially unviable in the near future.
While some business owners believe the counter-tariffs could boost domestic sales, others fear the higher costs will make it challenging to navigate the escalating trade war.
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Updated List of Tariffed Items
Starting September 8, Canada will impose tariffs ranging from 15 to 50 per cent on various U.S. products.
The affected goods include seafood, specific paper items, furniture, clothing, tools, motorcycles, as well as products made of iron or steel, paper, and machinery. The selection of items for tariffs was targeted, aiming to minimize the impact on Canadian consumers and industries while hurting American businesses.
According to economist Bradley Saunders, the countermeasures are expected to have a modest effect on inflation, with government support initiatives potentially offsetting part of the negative impact on business growth.
University of Calgary economist Trevor Tombe’s analysis indicates that the majority of counter-tariffed items are industrial supplies or raw materials, impacting businesses more than consumers.
For companies like Danby Appliances in Guelph, Ontario, the new tariffs could present opportunities. Owner Jim Estill mentioned that while some costs would rise due to the tariffs, they could help keep U.S. competitors out of the Canadian market for certain products like refrigerators.
While acknowledging manageable cost increases, Estill highlighted the potential for Canadian-made products to gain market share, particularly with the 25 per cent tariffs on items such as refrigerators.
However, Estill cautioned that despite some benefits, the counter-tariffs could have an overall negative impact, especially if consumer spending is affected by the trade tensions.
Concerns About Business Support
Simon Gaudreault, the chief economist at the Canadian Federation of Independent Business (CFIB), expressed concerns about the implications of retali