Derek Friesen, the owner of PhiBer Manufacturing Inc. in Manitoba, revealed that the ongoing trade tensions between Canada and the U.S. had largely not affected his agricultural equipment manufacturing business. However, the situation changed with the recent announcement of retaliatory Canadian tariffs on $27.6 billion worth of U.S. goods.
PhiBer Manufacturing Inc. specializes in producing agricultural equipment, including dash trailers crucial for large-scale farmers in crop cultivation. Despite sourcing frames for these trailers from Iowa for years, the imposition of new retaliatory tariffs on these frames, effective September 8, will significantly impact the company’s operations.
Friesen expressed concerns about the potential price hikes resulting from taxing vital components like the frames, stating that such increases could be unsustainable for farms. He anticipates that the trailers, constituting 70% of his sales, might become financially unfeasible in the near future.
The targeted list of newly tariffed items includes a wide range of products, such as seafood, paper goods, furniture, apparel, tools, and motorcycles. Bradley Saunders, an economist at Capital Economics, highlighted that the Canadian government’s approach in selecting these goods aimed to minimize the impact on consumers while hurting American businesses.
Despite the adverse effects of retaliatory tariffs on many businesses, some, like Danby Appliances in Guelph, Ont., may benefit from the new measures. Jim Estill, the company owner, mentioned that while some components would face increased costs due to tariffs, the competitiveness of Canadian-made products, like refrigerators, could improve compared to U.S. imports.
Simon Gaudreault, chief economist at the Canadian Federation of Independent Business (CFIB), emphasized the challenges posed by retaliatory tariffs to Canadian business owners, especially those reliant on U.S. imports. Gaudreault expressed doubts about the effectiveness of government support measures in mitigating the negative impacts on businesses.
The CFIB data indicates that retaliatory tariffs could pose a significant threat to Canadian businesses, given the higher ratio of U.S. component importers to exporters. Gaudreault stressed the importance of resolving the trade war, echoing Friesen’s sentiment that a resolution is essential for the business community’s stability.
The federal government’s $7.5 billion support package for businesses and workers affected by the trade war includes measures like enhanced employment insurance benefits and funding for medium-sized businesses. However, concerns remain about the accessibility and effectiveness of these programs in aiding businesses through the turbulent trade environment.