Derek Friesen, the owner of PhiBer Manufacturing Inc. in Manitoba, expressed that the trade tensions between Canada and the U.S. had not significantly impacted his agricultural equipment business, except for some products affected by prior 10 per cent duties. However, with the recent announcement of retaliatory Canadian tariffs on $27.6 billion worth of U.S. goods, his company is now facing challenges. PhiBer Manufacturing Inc. produces agriculture equipment, including dash trailers crucial for large-scale farming operations. These trailers utilize frames imported from Iowa, which will now be subjected to new retaliatory tariffs starting on Sept. 8.
Friesen highlighted that imposing tariffs on essential components like these frames would inevitably lead to a significant increase in production costs. He expressed concern that such cost hikes would be unsustainable for farms, potentially rendering the trailers, which constitute 70 per cent of his sales, economically unfeasible in the near future. While some businesses anticipate a boost in domestic sales due to the countermeasures, others fear the adverse impacts of higher costs resulting from the trade dispute.
The newly imposed Canadian tariffs, ranging from 15 to 50 per cent, will affect various U.S. products starting in September, including seafood, paper goods, furniture, apparel, tools, and motorcycles. Bradley Saunders, an economist, noted that the targeted approach in selecting tariffed items aimed to minimize the impact on Canadian consumers while hurting American businesses. Saunders suggested that the countermeasures would have a marginal effect on inflation, with government support programs expected to mitigate a portion of the negative impact on businesses.
For Danby Appliances, based in Guelph, Ontario, the tariffs could offer some advantages. Owner Jim Estill mentioned that while certain parts used by the company would face higher prices, the tariffs might make Canadian-made products more competitive in the market, particularly for items like refrigerators. Despite the potential benefits, Estill acknowledged that the counter-tariffs could still pose challenges, especially if consumer spending is affected by the ongoing trade tensions.
Simon Gaudreault, the chief economist at the Canadian Federation of Independent Business (CFIB), echoed concerns about the repercussions of retaliatory tariffs on Canadian businesses. CFIB data revealed that the tariffs could pose a significant threat to businesses that rely on U.S. imports for components. Gaudreault emphasized the importance of finding a resolution to the trade war, expressing doubts about the effectiveness of existing support measures in aiding businesses affected by the tariffs.
In response to the trade tensions, the federal government announced a $7.5-billion support package for businesses and workers impacted by the trade war. Despite these efforts, Gaudreault and other business owners remain skeptical about the efficacy of such measures in alleviating the challenges posed by the ongoing trade dispute. The general sentiment among business owners like Friesen is that a swift resolution to the trade war is essential to mitigate further economic strains.
The impact of the retaliatory tariffs on Canadian businesses remains a topic of concern, with many stakeholders emphasizing the urgency of resolving the trade tensions for the benefit of the economy and businesses across various sectors.