The trade war between the United States and Canada has made it more difficult and expensive for small businesses in these two countries to operate. Small business owners say that rising costs, especially in fuel, have added to their problems.
Reciprocal Tariffs and Their Impacts
Last week, Canada imposed reciprocal tariffs on about $20 billion (CA$27.6 billion) worth of American goods after Donald Trump imposed import taxes on Canadian goods of the same amount. In response to Canada's action, Trump announced that the United States would also ban imports of wine, whiskey, selected motorcycles, and dairy products from Canada.
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According to analysts, these tariffs cover about 5.5% of the bilateral trade in goods between the two countries, and their overall economic impact will be relatively small. However, small business owners who rely on cross-border sales say that taxes of up to 50% on their products and the tensions arising from these disputes have a compounded effect on them.
Impacts on Small Businesses
Owners of four small businesses, two in the United States and two in Canada, spoke about the impacts of the trade war on their companies. Matthew Kohler, one of the founders of Jasper Hill Farm, a cheese producer in Vermont, said: "The start of this war quickly led to the cancellation of holiday orders from major customers in Canada."
Kohler believes that his hopes for expanding his business in Canada have been halted due to the negative attitude of the residents there towards Trump's behavior as a long-time ally. He stated: "Market consequences actually have the most impact on us. These tensions have led to sanctions."
Revival Stillworks, a company that produces distillation equipment, is facing rising costs due to the new tariffs. Darcy Lynn, one of the founders of the company, said: "We have millions of dollars in orders that are supposed to be fulfilled in the next four to six months, and suddenly this situation arose."
Various organizations and suppliers have also added extra costs to their expenses due to rising fuel prices resulting from the war in the Middle East.
Future Outlook
Cassandra Soutsos, one of the owners and CEO of AmpRx in Nashville, sees trade tensions as a deterrent factor for the growth of her business. She emphasized that any aspect that is lost, due to the small size of her business, will have a significant impact on her.
Soutsos stated: "Currently, due to this situation, I am only able to reach a small percentage of the Canadian market. Transportation costs for imported components have increased two to three times compared to before the war."
As the trade war and international tensions impose additional costs on small businesses, many of these businesses are exploring other options to continue their operations.
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Source: abcnews.com
