Canadian businesses are commencing operations on Tuesday under the federal government’s new dollar-for-dollar tariffs on $28 billion worth of U.S. imports. While owners are preparing for increased costs and potential supply-chain disruptions, consumer impact is expected to be minimal, according to experts.
The newly imposed tariffs, effective as of 12:01 a.m. Tuesday, target nearly 700 American products with rates varying from 15 per cent to 50 per cent. The affected items range from essential commodities like steel and aluminum to everyday household goods such as toilet paper and specialized products like coin-operated arcade games.
These tariffs are a retaliatory measure by the federal government in response to the 50-per-cent tariffs imposed by the U.S. President Donald Trump’s administration on Aug. 22 on a wide array of products exceeding $28 billion, including plywood, cement, wine, and hockey sticks.
Dan Kelly, president of the Canadian Federation of Independent Business (CFIB), representing over 100,000 small and medium-sized enterprises nationwide, expressed concerns that this intensification of the trade conflict has left some members feeling marginalized by the government.
JS Furniture, a Manitoba-based retailer of home furnishings and appliances, estimates that American goods constitute 60 per cent of its sales volume. General manager Brian Kyca highlighted that laminate-style bedroom suites are among the most heavily impacted product categories, with larger items facing a 50 per cent tariff and smaller items a 25 per cent tariff.
Brian Kyca mentioned that assessing the implications has been challenging due to the limited information available from agencies like the Canada Border Services Agency. Despite the uncertainties, JS Furniture intends to absorb the added costs while negotiating with manufacturers to mitigate the impacts of importing U.S.-made goods.
Colin Mang, an economics professor at McMaster University, noted that businesses nationwide are navigating a delicate balance in addressing the tariffs. Retailers absorbed a significant portion of the tariff costs last year, passing on only a fraction to consumers. The extent to which retailers pass on costs this time will hinge on their expectations regarding the duration of the tariffs and their impact on profitability.
Regarding the impact on everyday consumers, Bank of Canada Governor Tiff Macklem emphasized that the tariffs are steep but are applied to a limited range of goods. The CFIB president, Kelly, expressed concerns about the disproportional impact of the counter-tariffs on certain businesses.
Kyca mentioned that the trade tensions have halted JS Furniture’s expansion plans and are affecting the company’s employees, particularly sales staff reliant on commissions. Mang highlighted that the new tariffs primarily target U.S. goods with Canadian alternatives, aiming to bolster domestic market share for Canadian companies.
Mang reassured that for the average Canadian family, the impact of the counter-tariffs on day-to-day life is expected to be minimal, emphasizing that the new tariffs are unlikely to significantly affect consumers.