'Half my business will be gone' - firms in Canada and US fear trade war

US and Canada Apply Reciprocal 50% Tariffs After Trade Negotiations End

Cindy Baldassi operates a stone-and-glass jewellery business in Calgary, Alberta, with 75% of sales directed to US customers. After the United States and Canada each imposed 50% tariffs on a range of the other’s products, Baldassi stated she would need to raise prices on most items by 50%. She estimated that at least half of her US sales could be lost.

US tariffs took effect on Saturday, covering Canadian wine, dairy, cement, clothing and hockey equipment. Canadian Prime Minister Mark Carney announced retaliatory duties beginning 8 September on US steel, dairy, appliances and electronics. The measures followed the collapse of bilateral trade talks over the weekend.

US tariffs apply to roughly $20 billion in Canadian goods, equivalent to about 5% of Canada’s exports to the United States. Canadian officials had suspended negotiations, describing the proposed terms as uneconomic and unfair. The US administration has linked its tariff actions to the breakdown in those talks and to longstanding disputes over market access.

Matteo Sgaramella, founder of the Toronto menswear brand Outclass, said orders placed by US retailers in January are scheduled for September delivery. He noted that an additional 50% charge upon arrival would likely lead buyers to cancel shipments. Sgaramella reported that US sales account for 20% of wholesale and 20% of e-commerce revenue. He said smaller firms lack the flexibility available to larger companies to absorb or redirect costs.

A US retailer operating for 51 years described similar pressures on gift items. One best-selling pillow retailing at $59 would require a price increase to between $86 and $90 under standard markups. The owners said they plan to hold prices temporarily while monitoring developments, noting that sudden tariff changes leave limited time for adjustments with suppliers.

Bill Easton, owner of Terre Rouge Wines in Plymouth, California, has stored wine intended for Canada in a warehouse for the past 18 months because of an earlier Canadian boycott of US alcohol. He pays $2,400 monthly in storage fees. Easton said he cannot pass accumulated costs to Canadian buyers if shipments resume.

Heather Seevers operates Northwest Yarns and Mercantile in Bellingham, Washington, 25 minutes from the border. Canadian customer traffic has declined about 20% since tariff measures began more than a year earlier. Seevers said some Canadian customers cited political statements by US officials, including references to Canada as a potential 51st state, as reasons for avoiding cross-border purchases. The shop has sought community support through fundraising. Seevers described the latest tariffs as likely to extend the period required to restore prior trade volumes.

The sequence of measures began with Canadian suspension of talks, followed by US tariffs on the specified volume of Canadian exports and Canadian counter-tariffs on listed US categories. Both governments have stated that the duties will remain in place until new terms are reached. Business owners on each side of the border have reported that the duties increase landed costs on cross-border shipments and reduce order volumes from the other market.

Additional reporting from Nadine Yousif.