Tariff pain still uncertain, but Canadians consumers are already retaliating

We’ve been here before as Canada awaits the (potential) implementation of US tariffs on billions of dollars’ worth of goods.

With the Trump administration seemingly intent on starting tariffs from Tuesday, the level at which importers will be dissuaded from buying from Canada is still uncertain. It could be 25% on anything but Canadian energy (which would face a 10% tariff), but it could be lower, or not at all – at least for now.

Speaking on Fox News yesterday, US commerce secretary Howard Lutnick was unable to expand on the details other than to say negotiations between Trump’s team and officials in Canada and Mexico were ongoing and focused heavily on cross-border fentanyl movements following positive moves on the control of illegal immigration.

“They have done a lot, so he’s [Trump] sort of thinking about right now how exactly he wants to play with Mexico and Canada and that is a fluid situation,” Lutnick said. “There are going to be tariffs on Tuesday on Mexico and Canada, exactly what they are, we’re going to leave that for the president and his team to negotiate.”

There is the chance of a further delay to tariffs but with additional tariffs affecting wider international trade due to start in April, there is little expectation of escaping a shift in trade with the US altogether.

“We will continue to work to ensure to do everything we can to make sure that there are no tariffs on Tuesday, but if ever there were tariffs on Tuesday, as we have all seen — as we were ready to do last time — we will have a strong unequivocal and proportional response as Canadians expect,” Justin Trudeau said yesterday.

For Canada’s small businesses, even a delay until April – when reciprocal tariffs are due to start – would not give them enough time to prepare for the impact according to the Canadian Federation of Independent Business.

“Our special survey on tariffs shows that over half of exporters expect it will take them more than six months to adapt to new markets and stabilize their operations. The uncertainty, coupled with ongoing inflationary pressures, is weighing down on small businesses, dampening their long-term outlook,” said Andreea Bourgeois, CFIB’s director of economics.

Canada’s big bank executives have expressed concerns that ongoing uncertainty over trade policies and impending tariffs could impact economic growth and business investment.

Canadian consumers shift choices

Whatever happens this week, or next month, Canadian consumers are already retaliating.

A Leger poll has discovered that most Canadians have eased back on purchases of US goods from stores in recent weeks and there has been a 55% reduction in their purchases from Amazon.

The poll also revealed that 83% of respondents are concerned about Trump using tariffs and other trade sanctions to force closer economic ties between the US and Canada and most support retaliatory measures by Ottawa.