Derek Friesen, the owner of PhiBer Manufacturing Inc. in Manitoba, recently felt the impact of the Canada-U.S. trade war on his agricultural equipment business. While his company had mostly dodged the trade war’s effects, the situation changed with the announcement of retaliatory Canadian tariffs on $27.6 billion worth of U.S. goods. PhiBer Manufacturing, known for its agriculture equipment like dash trailers used by large-scale farmers, imports frames for these machines from Iowa. However, these frames will now face new retaliatory tariffs starting September 8, leading to potential price increases for these essential components.
Friesen expressed concern about the financial implications of the tariffs, emphasizing that such added costs could significantly raise prices for farmers. The tariffs could render the Dash trailers, which constitute a significant portion of his sales, economically unviable in the near future. While some business owners anticipate potential benefits from the countermeasures, many fear the escalating trade war’s negative impact on their operations.
The targeted list of newly tariffed items includes a range of products subject to tariffs of 15, 25, or 50 percent beginning on September 8. These items span various categories such as seafood, paper products, furniture, apparel, tools, and motorcycles, with a focus on goods made of iron or steel, paper products, and machinery. Bradley Saunders, an economist at Capital Economics, highlighted the strategic selection of goods for tariffs to minimize adverse effects on Canadian consumers and industries while exerting pressure on American businesses.
The repercussions of the retaliatory tariffs vary across businesses like Danby Appliances, which anticipates both challenges and opportunities. While the tariffs may lead to increased costs for certain components, they could also enhance the competitiveness of Canadian-made products in the market. However, uncertainties loom over the overall impact of the tariffs, especially in terms of consumer behavior and market dynamics.
Simon Gaudreault, chief economist at the Canadian Federation of Independent Business (CFIB), echoed concerns about the tariffs’ detrimental effects on Canadian businesses. Noting the imbalance between imports and exports with the U.S., Gaudreault emphasized the heightened vulnerability of Canadian businesses to retaliatory tariffs. The CFIB data underscores the challenges faced by businesses in navigating the trade war’s disruptions and the adequacy of government support measures in mitigating the fallout.
Despite the government’s $7.5 billion support package for businesses and workers affected by the trade war, uncertainties persist regarding the effectiveness of these measures. Gaudreault expressed skepticism about the reach of the support programs and their alignment with the needs of small businesses. Amid these concerns, business owners like Friesen emphasize the urgency of resolving the trade war to safeguard their operations and financial stability.