Derek Friesen, the owner of PhiBer Manufacturing Inc. in Manitoba, shares how the ongoing trade tensions between Canada and the U.S. have impacted his agricultural equipment business. While his company had largely avoided the trade war, a recent announcement of retaliatory Canadian tariffs on $27.6 billion worth of U.S. goods will now affect his operations.
PhiBer Manufacturing Inc. specializes in producing agriculture equipment, including dash trailers used by large-scale farmers for crop maintenance. These trailers rely on imported frames from Iowa, which will be subjected to new retaliatory tariffs starting on Sept. 8. Friesen expresses concern that the increased costs from these tariffs will significantly raise the prices of their products, particularly affecting the affordability of their trailers, which constitute a significant portion of their sales.
The Canadian government plans to impose tariffs ranging from 15 to 50 percent on various U.S. products, including seafood, paper goods, furniture, apparel, tools, and motorcycles, starting on the same date. Bradley Saunders, an economist at Capital Economics, notes that the government strategically targeted items with available domestic alternatives to minimize the impact on Canadian consumers and industries. He believes that while these countermeasures may slightly raise inflation, government support programs could offset some of the negative effects on business growth.
Despite the challenges posed by the retaliatory tariffs, some businesses like Danby Appliances in Guelph, Ontario, see potential benefits. Owner Jim Estill mentions that while certain components will face higher prices due to the tariffs, the increased cost may make their Canadian-made products more competitive against U.S. imports. However, Estill acknowledges that the overall impact of the tariffs may still outweigh the benefits, especially if consumer spending is affected by the trade war.
Simon Gaudreault, chief economist at the Canadian Federation of Independent Business (CFIB), expresses concerns about the detrimental effects of the tariffs on Canadian businesses. The CFIB’s data indicates that the tariffs could pose a significant threat to businesses that rely on U.S. imports for components. Gaudreault emphasizes the importance of finding a resolution to the trade war, as he doubts that the government’s support measures will sufficiently aid affected businesses.
While the federal government has announced a $7.5-billion support package for businesses and workers impacted by the trade war, Gaudreault remains skeptical about the effectiveness of these programs. He points out that past support initiatives had limited uptake due to eligibility requirements, and he fears that many businesses may still struggle to access the assistance they need.
In conclusion, amidst the uncertainties brought about by the escalating trade tensions, business owners like Friesen emphasize the urgency of resolving the trade war for the well-being of Canadian businesses and the economy.
