Canadian businesses are commencing operations today under the federal government’s new dollar-for-dollar tariffs on $28 billion worth of U.S. imports. While many owners anticipate increased costs and supply-chain challenges, experts suggest that consumers may not experience significant impacts.
The newly imposed levies came into effect at 12:01 a.m. today, affecting nearly 700 American products with tariffs ranging from 15 per cent to 50 per cent. The targeted items include commodities like steel and aluminum, household goods such as toilet paper, and specialty products like coin-operated arcade games.
These dollar-for-dollar tariffs are Canada’s response to the 50-per-cent tariffs imposed by the U.S. administration on various products valued over $28 billion on August 22. Dan Kelly, the president of the Canadian Federation of Independent Business (CFIB), representing over 100,000 small and medium-sized firms in the country, expressed concerns that this trade war escalation is disproportionately impacting their members.
JS Furniture, a Manitoba-based retailer of home furnishings and appliances, estimates that American goods constitute 60 per cent of its sales volume. The company’s general manager, Brian Kyca, highlighted that laminate-style bedroom suites are among the hardest-hit items, with larger pieces facing a 50 per cent tariff and smaller components subject to a 25 per cent tariff.
Amid the uncertainty surrounding the tariffs, JS Furniture plans to absorb the increased costs initially while negotiating with manufacturers to mitigate the impact. Kyca emphasized the challenges of interpreting the vague information provided by agencies like the Canada Border Services Agency and the importance of not passing on the additional costs to customers.
Economics professor Colin Mang from McMaster University noted that businesses nationwide are navigating the dilemma of absorbing tariff costs or passing them on to consumers. He highlighted that retailers absorbed a significant portion of the tariff costs last year, and the decision this time will depend on the expected duration of the tariffs and its impact on profitability.
Bank of Canada Governor Tiff Macklem acknowledged the added costs for some businesses due to the tariffs but mentioned that they apply to a relatively limited range of products. CFIB President Kelly expressed concerns about the unequal burden of the counter-tariffs on businesses.
JS Furniture has postponed its expansion plans due to the trade war’s repercussions, affecting its employees, especially sales staff reliant on commissions. Mang explained that Canada’s new tariffs aim to promote domestic alternatives for U.S. goods to help local companies capture a larger market share.
Despite these developments, Mang reassured that the new tariffs are unlikely to significantly affect the daily lives of most Canadians, emphasizing that the impact on consumers will be minimal.