VIDEO As the Trump administration is set to invoke new tariffs against Canadian exporters, many small businesses are already bracing for the worst.
U.S. President Donald Trump has ordered 50 per cent tariffs on a range of Canadian goods starting Aug. 19, after months of trade negotiations have yielded little progress.
The tariffs will affect about 40 per cent of exporters, 35 per cent of whom expect their revenues to fall by at least half, according to a recent survey from the Canadian Federation of Independent Business (CFIB).
Overall, more than 90 per cent of exporters are concerned about the incoming tariffs, with 32 per cent of respondents indicating they are “very concerned.”
The proposed levies cover more than 500 Canadian exports worth about US$20 billion and will include goods previously covered under the Canada–United States–Mexico Agreement (CUSMA).
“If the tariffs come into effect next week, they will cause massive dislocation for small businesses that rely on U.S. clients and American buyers that rely on Canadian suppliers,” CFIB president Dan Kelly said in a news release.
“Most of these businesses have been operating under the long-standing assumption that CUSMA-compliant goods would remain tariff free. The prospect of losing sales, slashing prices, or having to pivot to new markets altogether, is generating a lot of small-exporter anxiety in the lead-up to Aug. 19.”
U.S. officials have said the newest round of tariffs are in response to Canadian countermeasures against previous levies, including removing U.S. alcohol from store shelves.
The CFIB said industries most impacted are those selling machinery, lumber, plastics, food and jewellery, among others.
“Few small firms can absorb a 50 per cent tariff, and few can pass that cost on to customers while staying competitive,” Kelly added. “All eyes are on our negotiations with Washington as the stakes are very high for Canadian SMEs (small and medium-sized enterprises).”
Canadian government officials have been camped out in Washington trying to hash out a deal before next Wednesday’s deadline.
Sources told Bloomberg News that the framework of a deal would include the U.S. administration backing off the proposed tariffs, while Canada would step back on its retaliatory measures.
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Prime Minister Mark Carney is walking a political tightrope as he navigates the threat of steeper tariffs against Canadian companies, though negotiations are underway to find a solution.
Carney has promised that his government will not accept a bad deal, but the pressure is on with less than a week to find a solution.
And with some of the biggest trade irritants — namely provincial bans on U.S. booze — out of his control, concessions may be difficult to achieve.
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Today’s Data : Wholesale trade for June, U.S. retail sales for JulyEarnings: Aya Gold & Silver Inc.
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Today’s Posthaste was written by Ben Cousins with additional reporting from Financial Post staff and Bloomberg.
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