Canadian companies reel as U.S. tariffs take effect after trade talks collapse

Canadian businesses are facing a new wave of uncertainty as the United States implements significant tariffs on billions of dollars worth of Canadian goods. The tariffs, imposed by President Donald Trump at a rate of 50%, came into effect after trade negotiations between the two countries failed to reach an agreement.

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Canada was “walking away from a bad deal,”

In response, Canadian Prime Minister Mark Carney stated that Canada was "walking away from a bad deal" and vowed to retaliate with equivalent tariffs on U.S. products. This escalating trade dispute leaves many Canadian companies in a precarious position, concerned about the impact on their operational costs, sales figures, and employment levels.

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It’s difficult because you need to determine where you’re going to add the cost… you don’t want to scare the customer; so as a small business owner, your margins go down.

Small businesses, in particular, are feeling the pressure. Ela Onisto, owner of Wick’ed Fragrance House in Ontario, noted that even with a largely Canadian supply chain, she is experiencing higher costs for some materials while customers are spending less. "It's difficult because you need to determine where you're going to add the cost… you don't want to scare the customer; so as a small business owner, your margins go down," Onisto explained. She highlighted the "domino effect," where even Canadian suppliers can be impacted if they rely on the U.S. market.

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It’s a domino effect.

The Canadian Federation of Independent Business reports that 40% of small Canadian exporters have products included in the tariff list. One-third of these businesses anticipate a sales drop of 50% or more. Matthew Holmes of the Canadian Chamber of Commerce pointed to the extreme unpredictability of U.S. trade policy, citing over 52 changes to the American tariff and tax code in 2025 alone. This instability has led some companies to freeze investments, delay hiring, and postpone new product launches. While acknowledging the "no deal" scenario is undesirable, Holmes stated that government support for affected businesses and workers is an appropriate crisis response.

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In 2025, there were over 52 different changes to the American tariff and tax code. That’s more than one a week.