TORONTO – Canadian businesses are grappling with uncertainty as U.S. tariff policies fluctuate, seeking stability to plan future operations.
Immediate Impact
For entrepreneurs like Wes Love, owner of Taurus Craco in the Toronto area, the erratic nature of U.S. tariffs on Canadian goods has created a climate of unpredictability. His company, which imports machinery and distributes it across North America, faces challenges due to President Donald Trump’s inconsistent tariff policies.
“What has been creating indecision in the market is people don’t know which way this is going to go,” Love told the BBC. “And in small businesses, indecision is killer.”
Key Details Emerge
Taurus Craco was significantly impacted earlier this year when it incurred nearly C$35,000 in unexpected costs due to a shipment crossing the U.S. border just after a tariff deadline. Despite a temporary pause in tariffs, the financial hit remained, highlighting the punitive nature of the policies.
“It’s like dealing with the mob,” Love remarked, emphasizing the harsh realities faced by small businesses under these conditions.
Industry Response
Prime Minister Mark Carney has criticized the tariffs, labeling them “unjust.” He has engaged in discussions with President Trump to negotiate a new trade and security deal, aiming to restore stability. However, recent developments, including Trump’s abrupt decision to halt trade talks over Canada’s digital services tax, have added layers of complexity.
Canada is hugely reliant on trade with the U.S., with 75% of its exports heading south, according to Statistics Canada.
By the Numbers
Canada’s economy has felt the sting of the trade war, with growth slowing to 0.8% in the first quarter of 2025 and a slight contraction of 0.1% in April, as reported by the Canadian Federation of Independent Business (CFIB).
What Comes Next
As the July 16 deadline for a new trade agreement approaches, businesses like Taurus Craco are hopeful for a resolution that provides clear guidelines. “Give us a set of rules and leave them alone and let us operate within those rules,” Love emphasized.
Background Context
The tariff saga began on February 1 when Trump imposed a 25% tariff on most Canadian imports, only to suspend and then reimpose them, creating a turbulent environment for cross-border trade. The manufacturing sector, particularly metals and automotive industries, has been prominently affected.
Expert Analysis
Gaphel Kongtsa, international policy director at the Canadian Chamber of Commerce, noted that businesses are navigating a fluid landscape where tariff changes occur without clear rationale. The service sector, though less directly impacted, suffers from diminished market confidence.
Sam Gupta, CEO of ElevatIQ, reported a 50% decline in service inquiries, highlighting the broader economic impact.
Regional Implications
The manufacturing spotlight often overshadows the service sector, which constitutes a significant portion of Canada’s economy. Despite Ottawa’s relief measures, service industries remain largely uncompensated, leading to frustration among business leaders like Gupta.
Timeline of Events
- February 1: Initial 25% tariff imposed on Canadian imports.
- March: Global 25% tariff on steel and aluminum introduced.
- April: Temporary tariff suspension, followed by reimposition.
- May: Exemptions for USMCA-compliant goods granted.
- June: Metals tariff increased to 50%.
As negotiations continue, Canadian businesses remain on edge, awaiting a resolution that could stabilize their operations and restore confidence in cross-border trade.