The damage done by Donald Trump’s chaotic tariff war has Ontario businesses looking for new trading partners and allies, in the midst of deep uncertainty caused by the conflict.
That’s according to groups representing businesses and workers across the province, who say one of the most profound impacts of the U.S. president’s scatter-shot approach has been to undermine decades of trust built between the two countries.
The uncertainty has meant businesses across the province are now planning with an eye to Trump’s mercurial behaviour, said Ontario Chamber of Commerce CEO Daniel Tisch.
“The White House has shown itself to be unreliable, untrustworthy and uncoordinated,” he said. “I think the worry is that even if we do get to a deal … there’s no guarantee that later in his term, the president won’t turn on us again.”
Trump has long been a proponent of tariffs as a way to raise revenue for the United States and re-shore manufacturing jobs. Since taking office in January he has threatened to impose 25 per cent tariffs on most Canadian goods, a move critics argue will dramatically increase prices for American consumers while hurting businesses on both sides of the border.
Trump also pushed ahead with some tariffs earlier this week, including sweeping 25 per cent charges on steel and aluminum.
Ontario Premier Doug Ford and federal finance minister Dominic LeBlanc said high-level meetings in Washington gave them hope a trade war breakthrough remains possible, despite U.S. President Donald Trump’s promise ‘not to bend at all’ before repeating his calls to make Canada the 51st state.
Trump threats and backtracks sow seeds of doubt
Tisch said Trump’s threats and subsequent backtracks on many of the tariffs have sowed seeds of doubt within many Canadian businesses. They’re holding off investments, finding new trading partners outside of America and laying off workers.
“You’re already seeing Canadian businesses look for new partners in Europe, in Asia and Latin America, where we have trade agreements and we have countries that actually value the alliances with us,” he said,
Tisch said the U.S. will remain Canada’s largest trading partner, so stability must be achieved by renegotiating the U.S.-Mexico-Canada free trade agreement.
“But at the same time, we need to ensure that we’re never this vulnerable again, and that means diversifying trading relationships with other markets and building new alliances,” he said.
Canadian ice cream company, Chapman’s, told CBC News Networks earlier this week that it has already broken ties with some long-time U.S. suppliers because of rising costs.
“It’s unfortunate, some of these companies we’ve been doing business with for over 30 years, and if anything, we’re incredibly loyal to these suppliers,” Ashley Chapman, the company’s chief operating officer, said in an interview with CBC’s Heather Hiscox.
“It’s devastating for both sides of the border.”
Canada has to do things differently, Unifor pres says
Unifor National President Lana Payne said she thinks one of the early casualties of Trump’s trade war has been a long-standing good relationship between the U.S. and Canada.
“I think we’ve all come to the understanding that even if we do work out a trade agreement, the trust is gone,” Payne said. “Canada has to do things differently. It’s a giant wake up call.”
Payne said the federal and provincial governments must roll out promised programs to help businesses transition to new trade arrangements with other countries and spend billions on national infrastructure projects, giving that work only to Canadian firms.
“We know that our cities need transit,” she said. “We can build that transit right here in Canada. We can get on with doing a lot of this right now.”
With uncertainty around tariffs and the stock market, CBC’s Shawn Jeffords explores how Ontario businesses plan to move forward amid the Canada-U.S. trade war.
Manufacturers feeling ‘exhaustion and frustration’
Dennis Darby, CEO of Canadian Manufacturers and Exporters, said members of that organization are feeling “exhaustion and frustration” with the situation, and the historic trade agreements have been working for businesses across North America.
“This is someone trying to solve a problem that doesn’t exist,” he said of Trump.
Darby said the uncertainty introduced by the Trump tariffs means the country will need to do more to not only tear down interprovincial trade barriers to help manufacturers, but must build a more extensive transportation network from coast-to-coast to make trade in Canada easier.
“The vast majority of those transportation networks go north-south,” he said. “We have to start thinking about how to go east-west again.”
But Darby said it has taken decades to build the current trade relationships and integrated production system between Canada and the U.S., and efforts to move away from it will take decades more.
The Canadian Federation of Independent Business said its members have tried to stockpile non-perishable inventory to avoid the tariffs, but that isn’t always an option. Others are looking for new suppliers or customers in international markets which will take months or years.
“I think many are still struggling a little bit to understand what their options are,” said Corinne Pohlmann, CFIB’s executive vice president for advocacy.
The CFIB wants to see the money raised by retaliatory tariffs directed back to businesses in the form of tax cuts or breaks to help reduce costs. The federation is oncerned that another round of business loans similar to those used during the pandemic will just heap more costs on businesses down the road, Pohlmann said.
“Many businesses are still carrying COVID debt and are not as keen to take on more,” she said. “So, what can we help them with today that will get them through this hump and help them transition to other markets?”
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