New 50% tariffs threaten cross-border sales as companies warn higher prices could drive customers away and squeeze already-thin margins
WASHINGTON: Small businesses across the United States and Canada are preparing for significant disruption after trade negotiations collapsed and both governments moved toward imposing 50% tariffs on selected goods.
US President Donald Trump’s latest tariffs took effect on Saturday, targeting Canadian products including wine, dairy, clothing, cement and hockey equipment. Meanwhile, Canadian Prime Minister Mark Carney announced retaliatory tariffs beginning September 8 on American steel, dairy products, appliances and electronics.
Calgary jewellery maker Cindy Baldassi said American customers generate around 75% of her sales. Consequently, she expects to raise prices on most products by 50% to absorb the additional costs.
Baldassi warned that the increase could eliminate much of her US business.
Canadian Exporters Fear Losing American Customers
Meanwhile, Ontario-based Lind Furniture said tariff uncertainty had already discouraged purchases since Trump returned to office. General manager Michael Saifer warned that Canadian companies face intense competition because American buyers can easily switch suppliers.
The latest US measures affect roughly $20 billion worth of Canadian exports, while existing duties already cover steel, aluminium, automobiles and lumber.
Furthermore, Toronto menswear company Outclass faces uncertainty over products American retailers ordered months before the new tariffs emerged. Founder Matteo Sgaramella warned that small companies could struggle to absorb sudden additional costs.
American Retailers Also Feel Growing Pressure
Across the border, Portland retailer Paloma Clothing expects tariffs to sharply increase the cost of Canadian-made decorative pillows, potentially pushing their retail price from $59 to nearly $90.
Meanwhile, businesses near the Canadian border are also reporting declining customer traffic.
Northwest Yarns and Mercantile in Bellingham, Washington, said Canadian visits have fallen around 20% during the trade dispute.
With retaliatory measures approaching, businesses increasingly fear prolonged uncertainty, weaker cross-border demand and higher consumer prices as Washington and Ottawa remain locked in their escalating trade confrontation.
