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 many business owners are preparing for increased costs and supply-chain challenges, experts suggest that consumers may not experience significant impacts.
The newly imposed levies became effective at 12:01 a.m. Tuesday, targeting nearly 700 American products with tariffs ranging from 15% to 50%. The affected items span from basic commodities like steel and aluminum to everyday household items such as toilet paper and specialized products like coin-operated arcade games.
These dollar-for-dollar tariffs are Canada’s response to the 50% tariffs imposed by the U.S. President Donald Trump’s administration on various products exceeding $28 billion on August 22. Dan Kelly, President of the Canadian Federation of Independent Business (CFIB), representing over 100,000 small and medium-sized firms nationwide, expressed concerns that this latest trade war escalation has left some members feeling neglected by the government.
JS Furniture, a Manitoba-based retailer of home furnishings and appliances, with multiple locations, estimates that about 60% of its sales volume comes from American goods. General manager Brian Kyca highlighted that products like laminate-style bedroom suites, including dressers and chests, face a 50% tariff, while smaller items like headboards and nightstands are subject to a 25% tariff.
Kyca mentioned the challenge of assessing the impact due to the limited and vague information available, particularly from agencies like the Canada Border Services Agency. Despite planning to absorb the increased costs, JS Furniture aims to negotiate with manufacturers to mitigate the impact on U.S.-sourced goods for customers awaiting deliveries.
Colin Mang, an economics professor at McMaster University, noted that businesses nationwide are navigating a delicate balancing act in response to the tariffs. Retailers may absorb a significant portion of the tariff costs, passing on only a fraction to consumers, depending on their expectations regarding the tariff duration and its impact on profitability.
Bank of Canada Governor Tiff Macklem emphasized that while the tariffs will add costs for some businesses, the impact is expected to be limited due to their application to a relatively narrow base. The ongoing trade tensions have prompted concerns among business leaders like Kelly and Kyca, with JS Furniture delaying expansion plans and employees feeling the effects, particularly amid consumer spending caution.
Mang explained that Canada’s new tariffs primarily target U.S. goods with domestic alternatives, aiming to bolster Canadian companies’ market share domestically. He reassured consumers that the impact on their day-to-day lives from these counter-tariffs is expected to be minimal, emphasizing that most Canadians are unlikely to notice significant changes.