The tariffs “will cause massive dislocation for small businesses that rely on U.S. clients and American buyers that rely on Canadian suppliers,” says Dan Kelly, CFIB president. “Most of these businesses have been operating under the long-standing assumption that [Canada-United States-Mexico Agreement] (CUSMA)-compliant goods would remain tariff free. 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.”
The U.S. government’s threatened 50% tariffs on $28 billion in Canadian goods could ultimately cost the Canadian economy around 50,000 jobs – and the trade uncertainty driving that risk is unlikely to disappear before the end of President Donald Trump’s mandate, according to a previous report.
The five sectors with the largest concentrations of exposure are machinery and equipment; wood, forestry and building products; plastics, polymers and packaging; agricultural, food and beverage products; and arts, jewellery and creative products, according to the CFIB.
Already, more Canadian businesses are closing than opening, with exits outpacing entries for six consecutive quarters – a reversal that threatens job creation, wage growth and career mobility across Canada, the CFIB previously warned.
Federal government’s comments
Previously, Prime Minister Mark Carney called the tariff action “the latest in a series of unilateral U.S. trade actions” that violate CUSMA, adding that Canada has made detailed proposals to resolve the dispute and modernize the agreement, and stands ready to intensify discussions in the coming weeks, according to a CBC News report released in July.