Derek Friesen, CEO of PhiBer Manufacturing Inc. in Manitoba, expressed how the Canada-U.S. trade conflict had previously had minimal impact on his agricultural equipment business, except for some products that faced a 10 per cent tariff earlier. However, with the recent announcement of retaliatory Canadian tariffs on $27.6 billion worth of U.S. goods, a significant change is looming.
PhiBer Manufacturing Inc. specializes in producing agricultural equipment, including dash trailers essential for large-scale farming operations. These trailers have traditionally used frames imported from Iowa. Nevertheless, starting from September 8, these frames will be subjected to new retaliatory tariffs, leading to an inevitable rise in production costs.
Friesen highlighted concerns about the potential significant price hikes resulting from the imposed tariffs, emphasizing the challenges this might pose for farms that cannot absorb such increases. He anticipates that the economic feasibility of these trailers, constituting 70 per cent of his sales, may be jeopardized in the near future.
The new tariffs, ranging from 15 to 50 per cent, will affect various products such as seafood, paper goods, furniture, apparel, tools, and motorcycles. Bradley Saunders, an economist at Capital Economics, noted that the Canadian government’s targeted selection of goods for tariffs aimed to minimize the impact on consumers and domestic industries while targeting American businesses.
Although the retaliatory tariffs may bring about challenges for many Canadian businesses, some like Danby Appliances in Guelph see potential benefits. Owner Jim Estill acknowledged that while certain parts used by his company will face price hikes due to the tariffs, they could make Canadian-made products more competitive compared to U.S. imports, potentially boosting market share.
Simon Gaudreault, chief economist at the Canadian Federation of Independent Business (CFIB), echoed concerns about the negative implications of retaliatory tariffs on Canadian businesses. Despite the federal government’s $7.5 billion support package for businesses affected by the trade war, Gaudreault remains skeptical about the effectiveness of these measures in alleviating the financial burdens imposed by the ongoing conflict.
In conclusion, amidst the escalating trade tensions, the overarching sentiment among many business owners remains rooted in the hope for a resolution to the trade war to mitigate further economic strains and uncertainties.
