When Tia Masic first heard whispers about potential trade disruptions, she and her team at Hemlock & Oak began preparing for the worst. Now, with 50 percent American tariffs slamming into $28 billion worth of Canadian exports, the Coquitlam stationery company is facing a financial hit it can barely absorb. The business has already committed to covering $100,000 in costs on pre-orders for 2027 planners destined for American customers—a promise made before the trade talks collapsed spectacularly late last Friday.
“We’ve tried to prepare as much as possible over the last month, ever since we found out about this, but it’s basically buckle up,” Masic admitted. “It’s going to get a little rocky.”
Trade Negotiations End in acrimony
The breakdown came suddenly. Both Ottawa and Washington traded blame for the collapse, each pointing to last-minute demands that proved impossible to meet. Within hours, the new tariff regime took effect, imposing eye-watering duties on everything from construction materials and dairy products to spirits and honey. British Columbia, with its deep economic ties to the American market, emerged as one of the provinces most exposed to the sweeping measures.
Existing sectoral tariffs on steel, aluminium, automotive goods and softwood lumber remain firmly in place, meaning Canadian exporters face a layered system of punitive costs stacking ever higher.
A Nightmare for Independent Traders
Ryan Mitton of the Canadian Federation of Independent Business described the situation in stark terms. “This is definitely a nightmare scenario for many small businesses,” he said. “You look at the list of tariffs that are going to impact them; there’s 18 pages of items that are at the heart of what small businesses sell and do.”
The scope of affected products means companies like Hemlock & Oak must contend with rising costs on raw materials, shipping and components even as their American customer base shrinks under the weight of new duties. For a niche stationery brand, the margins were already thin.
At a public event on Monday morning, British Columbia’s Transport Minister Mike Farnworth offered his government’s backing to the federal position. “We’re working very closely with the federal government; we support their decision to walk away from the negotiations,” he stated, signalling provincial unity behind Ottawa’s hard line.
Political Temperature Rises on Both Sides
The diplomatic fallout has been swift and sharp. Prime Minister Justin Trudeau is preparing counter-tariffs set to take effect next month, with officials suggesting the measures will be surgical rather than matching American duties pound-for-pound. The strategy appears designed to maximise pressure on specific American industries while minimising collateral damage to Canadian consumers.
American President Donald Trump has already indicated further tariffs could land by 1 January 2027, threatening additional escalation. Premier David Eby appeared on CNN on Monday, delivering a blunt assessment. “It’s a bizarre policy for Americans; it’s going to hurt them,” he said. “Unfortunately, Canada has to hit back.” His social media carried an even sharper message: a direct rebuff of any suggestion Canada might become the 51st American state.
Back in Coquitlam, Hemlock & Oak is regrouping. The immediate focus is survival—finding ways to trim costs and exploring whether diversification into new markets might offset the American shortfall. It’s a strategy born of necessity rather than ambition, but for Masic and her colleagues, adaptation is the only path forward.
Why it Matters
The collapse of Canada-U.S. trade talks represents more than a diplomatic setback—it signals a fundamental reshaping of the economic relationship that has defined North American commerce for decades. Small and medium-sized enterprises, often operating with minimal profit margins and limited ability to absorb sudden cost shocks, find themselves on the front line of a trade war none of them chose. The ripple effects will extend far beyond balance sheets: jobs are at risk, supply chains are fracturing, and consumer confidence in both countries faces mounting pressure. As Ottawa prepares its response and Washington dangles the threat of further tariffs, businesses like Hemlock & Oak must navigate an environment where the only certainty is continued uncertainty.
