Shockwaves in Canada Trump's Tariffs Threaten Businesses' Dependence on US

Title Shockwaves in Canada Trump's Tariffs Threaten Businesses' Dependence on US

The announcement by US President Donald Trump of 25% tariffs on Canadian imports has sent shockwaves through the Canadian business community, leaving many companies wondering about their reliance on trade with the United States. The uncertainty and unpredictability have created widespread anxiety among Canadian businesses that rely heavily on exports to the US.

Matthew Holmes, vice president of the Canadian Chamber of Commerce, describes the situation as an absolute shock. He notes that there is an incredible amount of anxiety stemming from the unpredictability and uncertainty surrounding Trump's tariffs. It was a wake-up call, he said.

The threat of tariffs has done little to alleviate concerns among Canadian businesses, which rely heavily on trade with the US. With over 75% of Canada's exports heading south of the border, the risk of a trade war looms large. The stakes are high, as nine out of 10 Canadians agree that Canada needs to reduce its reliance on US trade.

To prepare for the tariffs, Holmes believes Canada must remove barriers to interprovincial trade and diversify its export markets. We need to be ready and have the infrastructure and relationships in place now, he emphasized.

Economists agree that it won't be easy to disentangle from the United States. Robert Gillezeau, an economics professor at the University of Toronto, notes that the two economies are extremely interconnected. Some sectors will find it challenging to adapt, making diversification crucial.

The food industry is a prime example of this challenge. Mike Bono of Can-Am Food Services has frozen purchases of some American goods and is seeking alternatives, but finding substitutes for all American offerings may not be possible.

Another key area of focus is the removal of interprovincial trade barriers, which have been flagged as a way to boost Canada's economy since 1940. Ottawa led efforts to dismantle these barriers in 2017, but hundreds of exceptions were kept in place. Internal Trade Minister Anita Anand believes that removing these barriers could lower prices by 15%, boost productivity, and inject up to Can$200 billion into the economy.

Some are also calling for east-west oil and gas pipeline projects to be revived to reduce dependence on US infrastructure. Oil from western Alberta is currently shipped via a pipeline that dips into the United States before emerging in Ontario.

As Canada navigates this uncertain landscape, it's clear that a concerted effort will be needed to mitigate the impact of Trump's tariffs and build a more diversified economy. With the right strategies in place, Canada can position itself for success and reduce its dependence on US trade.

Keywords Canada, trade, US tariffs, business, economy

Edward Lance Arellano Lorilla

CEO / Co-Founder

Enjoy the little things in life. For one day, you may look back and realize they were the big things. Many of life's failures are people who did not realize how close they were to success when they gave up.