There is growing concern among Canadian manufacturers about 25 per cent tariffs being pitched by President-elect Donald Trump.
Nearly three in five anticipate “severe impacts” from the tariffs, according to a recent survey by Canadian Manufacturers & Exporters (CME).
Ron Marcolin, divisional vice-president at the trade association, said the tariff threats are already having negative impacts.
“Some Canadian manufacturers have accelerated production. They’ve actually some of them have moved production to the United States, if in fact they have a production facility in the U.S.,” Marcolin told our newsroom.
“Others have actually brought in raw materials quicker than scheduled, produced quicker than scheduled. They want to get as much of their product either inbound to then build and or outbound.”
One in five manufacturers have reported freezing hiring while nearly one-third are delaying investments, according to the survey of just over 300 businesses.
CME said around $1 trillion worth of goods crossed the Canada-U.S. border in 2023, which works out to around $3 billion per day.
Marcolin said Canada is a vital supplier to U.S. businesses and tariffs would harm manufacturers and citizens on both sides of the border
“When this occurred in both 2018 and 2020, Canada implemented countervailing duties and tariffs as well. So that is simply tit for tat,” he said.
“What that means to the average American is their costs are going up as well. And what President-elect Trump is not informing his electorate of is that it will be more expensive in the United States to buy product.”
The vice-president added that a lot of products Americans take for granted come from Canada, including energy, lumber and finished goods.
Marcolin said they worry that tariffs will increase inflation — which has only started to return to more normal levels — and create a recession.
CME is calling for bold government action and has highlighted six recommendations to help weather tariff challenges:
- strengthen diplomatic efforts to negotiate tariffs reductions or exemptions
- implement tax relief measures, such as deferring or reducing corporate taxes
- offer temporary financial assistance or targeted subsidies to mitigate revenue losses and support employee retention
- launch public awareness campaigns in the U.S. to promote Canadian products
- provide grants or low-interest loans to support businesses in adapting to new market conditions
- expand export diversification programs to open new international markets
Marcolin said few manufacturers can fully absorb tariff costs, even short term, which underscores the need for solutions to protect competitiveness.
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