The recent imposition of tariffs by the Trump administration is having a big impact on Canadian small businesses. The Canadian Federation of Independent Business (CFIB), an organization representing more than 100,000 small businesses in all 12 of Canada’s provinces and territories except for Ontario, stresses the profound effect that these tariffs are already causing to their members.
In March 2024, the U.S. government fired back with a 10% tariff on all Canadian energy. It required a 25% tariff on many imports from Canada and Mexico. President Trump followed suit, promising these very tariffs on Inauguration Day. Since then, they have cast serious shade on the reliability of the U.S. as a trading partner. According to a December 2024 survey conducted by CFIB, approximately half of its members are directly involved in importing or exporting to the U.S.
Corinne Pohlmann, CFIB’s executive vice president of advocacy, expressed her disappointment regarding the tariff situation, stating that many Canadians feel betrayed by the U.S. government’s actions.
“For a lot of Canadians, it felt like a betrayal.” – Corinne Pohlmann
The emotional cost and monetary impact of these tariffs are just now being realized. Canadian entrepreneurs are left with an agonizing decision. They need to choose which side of the border will pay for these new tariffs. The economic reality of the situation is pushing prices higher. It’s rattling the very purpose and structure of the longstanding Canada-U.S. trust.
Canada and the U.S. have long-shared a special and lucrative trade relationship. Moving into 2024, the total value of goods traded between them has already surged to an eye-popping $762.1 billion. These tariffs destroy that confidence. Over half of CFIB’s surveyed members reported skepticism regarding the reliability of the U.S. as a trading partner moving forward.
In response to the U.S. tariff measures, Canada has introduced a series of retaliatory measures. This action further complicates a fragile and deeply contentious trade landscape. The Liquor Control Board of Ontario (LCBO) halted all U.S. sản phẩm purchases, effective March 4. This decision is a great example of a growing Canadian business trend to support local products. Signs in LCBO retail stores, such as the one in Niagara-on-the-Lake, emphasize this shift with messages stating, “For the good of Ontario, for the good of Canada.”
Far more interesting is how many second-Guessing-the-tariff tweets that have led to a surging demand for Canadian-owned products. As of late March, one quarter of CFIB members indicated they had experienced an increase in market demand for locally-made goods. This growing demand reflects the larger movement to buy local. This positive trend indicates that even though tariffs present some immediate challenges, they could lead to a long-term growth in homegrown industries.
Even with this potential silver lining, Pohlmann is guarded about the future of trade relations between Canada and the U.S. Though she strongly notes that the current state of affairs has caused a tear in the fabric that might not ever be repaired.
“While we’d welcome a permanent reprieve from tariffs, the trading relationship between Canada and the United States has been fractured and may never be the same again,” – Corinne Pohlmann
The consequences of these tariffs reach beyond just economics. They insinuate themselves into national identity and international ties. Right now Canada is in rocky seas. At this pivotal moment, it needs to rethink its international dependencies and priorities.
U.S. Secretary of State Antony Blinken has already underscored the broader geopolitical ramifications of these trade tensions. He warned about the potential for countries like China to gain influence if traditional trading partners lose trust in one another.
“The idea that we would not only see China try to develop more soft power, but that we would cede our own…not good for the country, not good for our interests,” – Antony Blinken