The clock is ticking with a week to go before U.S. President Donald Trump’s new round of tariffs hits Canadian exports and a survey of small Canadian exporters is warning of dire consequences if the sweeping 50 per cent levies take effect.
While Canada has been dealing with Trump’s tariffs for more than a year, including with sectoral tariffs on steel, aluminum and automobiles, the vast majority of Canadian goods traded under the Canada-U.S.-Mexico Trade Agreement (CUSMA) have been exempt from Trump’s tariffs.
This could change on Aug. 19.
Around two in five Canadian exporters said they currently export a product to the U.S. that would fall under the scope of the new incoming tariffs, a survey from the Canadian Federation of Independent Business said on Wednesday.
Of these, more than three-quarters (77 per cent) said they expect to lose revenue if the tariffs go ahead and more than one in three (35 per cent) said they stand to lose at least half or more of their revenues.
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“Most of these businesses have been operating under the long-standing assumption that CUSMA-compliant goods would remain tariff free,” said CFIB president Dan Kelly.
“The prospect of losing sales, slashing prices, or having to pivot to new markets altogether, is generating a lot of small exporter anxiety in the lead-up to August 19,” he added.
Businesses have started battening down the hatches ahead of the next round of tariffs, a survey by Canadian business financing solutions firm Merchant Growth has found.
More than six in 10 small businesses surveyed told Merchant Growth that they have at least some reliance on the U.S., while 13 per cent said the relationship with the U.S. was “core” to their business.
More than half (55 per cent) have cut spending, while a quarter (25 per cent) have delayed hiring. Another quarter said they’ve raised prices for consumers.
Canadian officials are working to secure a deal with the U.S. before next week. Canada-U.S. Trade Minister Dominic LeBlanc is in Washington along with Canada’s chief trade negotiator Janice Charette.
LeBlanc and Charette met with U.S. Trade Representative Jamieson Greer on Tuesday.
“Discussions remain ongoing, and we continue to engage at the negotiation table to firmly advance and defend Canadian interests,” LeBlanc said in a statement.
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