Canadian businesses are preparing for fresh uncertainty after a breakdown in negotiations triggered a 50 per cent U.S. tariff on billions of dollars’ worth of Canadian goods. Prime Minister Mark Carney declared the country was “walking away from a bad deal” and promised dollar‑for‑dollar retaliation. The move has already begun to affect costs, sales and employment, prompting owners to reassess supply chains and pricing strategies while awaiting further government support.
Immediate pressure on small enterprises
Ela Onisto, who runs Wick’ed Fragrance House in Innisfill, Ontario, says she is already feeling the squeeze. She explained that keeping her supply chain Canadian does not fully insulate her because some local suppliers depend on the U.S. market. “It’s difficult because you need to determine where you’re going to add the cost… you don’t want to scare the customer; so as a small business owner, your margins go down,” she noted. Onisto added that customers are spending less while her input costs are rising, describing the situation as “a domino effect.”
The Canadian Federation of Independent Business reports that 40 per cent of small exporters sell items now covered by the tariff list, and a third of those firms anticipate sales dropping by half or more.
Industry leaders voice concern over unpredictability
Matthew Holmes, executive vice president and chief of public policy at the Canadian Chamber of Commerce, warned that the volatility of U.S. trade policy has already forced many firms to pause major investments, delay hiring or shelve new product launches. He pointed out that in 2025 alone there were more than 52 adjustments to the American tariff and tax code – “more than one a week,” he told Global News. Holmes said the current response from governments, treating the situation as a crisis, is appropriate.
Geoff Stewart, founder and president of Alberta‑based Rig Hand Craft Distillery, echoed those sentiments. He said worries over tariffs prompted the closure of a packaging plant in Texas, which in turn cost contracts in Texas, Arizona and Alaska. The distillery has shifted focus toward the Canadian market and overseas, recently completing its first shipment to Japan. Yet Stewart warned that moving away from the United States is not a simple fix for distilleries that rely heavily on U.S. exports, especially when some raw materials still come from south of the border. “The idea that there’s no tariffs today, and then in three days there are tariffs, and then seven days later, it might come off, then four days later it might come back. We can’t run our businesses with that amount of uncertainty there,” he said. “And so we just need to know what the path forward is.”
Government retaliation and support measures
Prime Minister Carney has pledged matching tariffs on U.S. goods, with further details expected in the coming days. Ontario Premier Doug Ford backed the federal decision, arguing the abandoned deal would have harmed the province’s auto, steel and manufacturing sectors. Other premiers have also rallied behind Carney’s stance while urging targeted assistance for industries and workers likely to feel the brunt of the new duties.
Ottawa has signalled additional programmes to help businesses and workers weather the shock, though specifics remain pending.
Why it Matters
The re‑imposition of steep U.S. tariffs threatens to disrupt tightly integrated North American supply chains, raising costs for manufacturers, eroding profit margins for small producers and potentially jeopardising jobs across multiple sectors. While retaliatory measures aim to pressure Washington back to the negotiating table, the immediate fallout is already being felt by firms that lack the scale to absorb sudden price shocks or to pivot quickly to alternative markets. Clear, stable trade policy is now essential not only for preserving existing economic ties but also for maintaining confidence among investors and entrepreneurs who rely on predictable cross‑border commerce.
