Canadian businesses have commenced operations on Tuesday following the initiation of the federal government’s new dollar-for-dollar tariffs on $28 billion worth of U.S. imports. While many business owners are preparing for heightened costs and supply-chain challenges, experts suggest that consumers may not experience significant effects.
The newly imposed levies came into effect at 12:01 a.m. on Tuesday, impacting nearly 700 American products with tariffs ranging from 15 percent to 50 percent. The affected items range from basic commodities like steel and aluminum to everyday household goods such as toilet paper and even niche products like coin-operated arcade games.
These dollar-for-dollar tariffs are a response by the federal government to the 50 percent levies imposed by U.S. President Donald Trump’s administration on August 22 on various products exceeding $28 billion in value. Dan Kelly, the President of the Canadian Federation of Independent Business (CFIB), representing over 100,000 small and medium-sized firms nationwide, expressed concerns that some members feel marginalized in the ongoing trade dispute with the U.S.
JS Furniture, a Manitoba-based retailer of home furnishings and appliances with multiple locations, estimates that 60 percent of its sales volume comes from American goods. General manager Brian Kyca highlighted the impact on certain items, such as laminate-style bedroom suites facing a 50 percent tariff on larger pieces like dressers and chests, and a 25 percent tariff on smaller items like headboards and nightstands.
Kyca mentioned the challenges of assessing the impact due to limited information from agencies like the Canada Border Services Agency. JS Furniture intends to absorb the increased costs temporarily while negotiating with U.S. manufacturers to mitigate the impact on customers awaiting deliveries.
Colin Mang, an economics professor at McMaster University, noted that businesses across Canada are navigating a delicate balance amidst the tariffs. He emphasized that retailers might absorb the tariff costs if they expect the tariffs to be short-lived, impacting their profitability.
Bank of Canada Governor Tiff Macklem addressed the potential economic impact of the Canada-U.S. tariffs, stating that while the tariffs could burden some businesses, they are applied to a relatively narrow range of products. Kelly from CFIB expressed concern over the uneven impact of counter-tariffs on businesses.
The trade tensions have forced JS Furniture to delay expansion plans, affecting its employees, particularly sales staff reliant on commissions. Mang highlighted that the new tariffs aim to promote domestic alternatives to offset losses in the U.S. market, with minimal impact expected on Canadian consumers’ daily lives.
Overall, the situation is not expected to significantly affect most Canadians in their day-to-day activities, as the new counter-tariffs primarily target U.S. goods with available domestic substitutes.