Canadian businesses have begun operating under the Canadian government’s new dollar-for-dollar tariffs on $28 billion worth of U.S. imports. While many businesses are preparing for increased costs and supply chain disruptions, experts suggest that consumers may not experience significant impacts.
The new tariffs came into effect at 12:01 a.m. on Tuesday, affecting nearly 700 American products with tariffs ranging from 15 per cent to 50 per cent. The targeted items vary from basic commodities like steel and aluminum to everyday household items such as toilet paper and more specialized products like coin-operated arcade games.
These tariffs are a response to the 50 per cent levies imposed by the U.S. President Donald Trump’s administration on a wide range of products worth over $28 billion on August 22. The President of the Canadian Federation of Independent Business (CFIB), Dan Kelly, expressed concerns that small and medium-sized businesses in Canada are feeling the brunt of this trade dispute.
JS Furniture, a Manitoba-based retailer, estimates that about 60 per cent of their sales by volume come from American goods. General manager Brian Kyca highlighted that certain furniture items, particularly laminate-style bedroom suites, will be significantly impacted by the tariffs, with larger items facing a 50 per cent tariff and smaller items a 25 per cent tariff.
Navigating the impact of these tariffs has proven challenging for businesses like JS Furniture due to limited information available from agencies like the Canada Border Services Agency. Despite the uncertainties, the company plans to absorb the additional costs temporarily while negotiating with U.S.-based manufacturers.
Economic experts, such as Colin Mang from McMaster University, anticipate that retailers may absorb a significant portion of the tariff costs rather than passing them entirely to consumers. However, prolonged tariffs could impact retailers’ profitability.
Bank of Canada Governor Tiff Macklem noted that while the tariffs will increase costs for some businesses, they are applied to a limited range of products. The CFIB president and JS Furniture’s general manager expressed concerns about the unequal impact of these tariffs on businesses and employees.
Mang highlighted that the tariffs aim to promote Canadian alternatives to U.S. goods and support domestic market growth. He reassured consumers that the new tariffs are unlikely to heavily impact their daily lives, emphasizing that most Canadians may not notice substantial differences due to these counter-tariffs.