Derek Friesen, the owner of PhiBer Manufacturing Inc. in Manitoba, expressed how the ongoing Canada-U.S. trade war had largely avoided impacting his agricultural equipment manufacturing business. However, the scenario changed when Canada announced retaliatory tariffs on $27.6 billion worth of U.S. goods. PhiBer Manufacturing Inc. specializes in producing agriculture equipment, particularly dash trailers crucial for large-scale farmers in crop management. These trailers, accounting for about 70% of the company’s sales, have traditionally sourced frames from Iowa. As of September 8, these frames will be subjected to new retaliatory tariffs, a move that Friesen anticipates will significantly elevate production costs.
The implementation of such tariffs is expected to escalate the prices of these trailers, posing challenges for both buyers and sellers in the near future. While some business owners view the countermeasures as a means to potentially stimulate sales within Canada, others like Friesen are concerned about the adverse impact on affordability and market feasibility.
In a targeted approach, Canada is set to impose tariffs ranging from 15% to 50% on various U.S. products starting September 8, affecting items such as seafood, paper products, furniture, apparel, tools, and motorcycles. Bradley Saunders, an economist at Capital Economics, noted that the selection of goods for tariffs appears to prioritize items with domestic alternatives to minimize the impact on Canadian consumers and industries.
While some businesses, like Danby Appliances based in Guelph, Ontario, may benefit from the tariffs by gaining a competitive edge in the market, others anticipate challenges. Jim Estill, the owner of Danby Appliances, mentioned that while some costs may rise due to the new tariffs, it could also drive consumer preference towards Canadian-made products over U.S. imports.
Simon Gaudreault, the chief economist at the Canadian Federation of Independent Business (CFIB), expressed concerns over the detrimental effects of retaliatory tariffs on Canadian businesses. Despite the government’s $7.5 billion support package for businesses and workers affected by the trade war, Gaudreault doubts the effectiveness of such measures in mitigating the impacts. The CFIB data highlights the vulnerability of Canadian businesses, especially those heavily reliant on U.S. imports.
The prevailing sentiment among business owners, like Friesen, is a desire for a swift resolution to the trade war to alleviate the growing challenges and uncertainties faced in the current economic landscape.