Skip to Content News Archives Economy Energy Oil & Gas Renewables Electric Vehicles Mining Commodities Agriculture Real Estate Mortgages Mortgage Rates Finance Banking Insurance Fintech Cryptocurrency Work Wealth Smart Money Wealth Management Investor Personal Finance Family Finance Retirement Taxes High Net Worth FP Comment Executive Women Puzzmo Newsletters Financial Times Business Essentials More Innovation Information Technology FP500 Podcasts Small Business Lives Told Tails Told Shopping Financial Post Store Obituaries Place a Notice Advertising Advertising With Us Advertising Solutions Postmedia Ad Manager Sponsorship Requests Classifieds Place a Classifieds ad Working Profile Settings My Subscriptions My Offers Newsletters Customer Service FAQ News Economy Energy Mining Real Estate Finance Work Wealth Investor FP Comment Executive Women Puzzmo Newsletters Financial Times Business Essentials HomeNewsEconomy‘Fighting for our life’: Canadian businesses reel from U.S. tariff shockFor many other small, domestic businesses, Canada’s counter-tariffs hurt more than the initial tariff blowAuthor of the article:Last updated 3 hours ago Fine Cotton Factory in Toronto. Photographer: Adetona Omokanye/Bloomberg Photo by Adetona Omokanye /Photographer: Adetona Omokanye/BThe economic pain that Prime Minister Mark Carney warned would come from a trade war is now harsh reality for some small businesses that export to the United States.Subscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman, and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.Subscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one account.Share your thoughts and join the conversation in the comments.Enjoy additional articles per month.Get email updates from your favourite authors.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one accountShare your thoughts and join the conversation in the commentsEnjoy additional articles per monthGet email updates from your favourite authorsSign In or Create an AccountorAcross Canada, companies are losing orders, contemplating job cuts and paying higher costs. For some, the threat is existential.Toronto-based Fine Cotton Factory Inc. exports 30 per cent to 50 per cent of its products to the U.S. Since the tariffs kicked in, some U.S. orders have been cancelled or postponed, and new ones from both sides of the border have slowed, according to Executive Vice President Skip Kann. He fears he’ll need let go a small number of his 250 employees as soon as this month.“We’re fighting for our life right now,” Kann said.SUBSCRIBER EXCLUSIVE: FP West: Energy Insider brings you behind the oilpatch’s closed doors with exclusive insights from insiders every Wednesday morning.By signing up you consent to receive the above newsletter from Postmedia Network Inc.A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of FP West: Energy Insider will soon be in your inbox.We encountered an issue signing you up. Please try againTalks between the two countries collapsed Aug. 21, triggering 50 per cent U.S. tariffs the next day on US$20 billion of Canadian goods such as textiles, paint, apparel, alcohol and honey. Canada announced retaliatory duties on imports from the U.S. worth roughly the same amount, which came into effect Tuesday. The risk is that the trade war will spiral further. Fine Cotton Factory in Toronto. Photo by Adetona Omokanye/BloombergMany small Canadian manufacturers were shielded from earlier U.S. tariffs because of exemptions under the North American trade pact. But the latest levies imposed by President Donald Trump in August ignore that deal.While the US$20 billion accounts for only about five per cent of Canada’s annual goods exports to the U.S., the new tariffs appear to disproportionately affect small and medium-sized businesses. In turn, those firms account for about half of Canada’s gross domestic product. The Canadian government bolstered loans and other financial support for such firms as part of a broader $7.5 billion (US$5.4 billion) package for businesses and workers hit by the latest round of tariffs.Those measures won’t put out the fire, Kann said. Like many entrepreneurs whose growth potential lies beyond Canada, he’s says already exhausted domestic opportunities. Plus, some federal supports, such as funding for market research and new technology, are longer-term fixes.It could be too late by the time the government solutions come through, Kann said.Fine Cotton’s survival isn’t just important for its workers. As owner of one of Canada’s only large-scale dye houses, the manufacturer is also crucial to Jerico, an Ontario clothing maker that prides itself on a fully domestic supply chain. Fine Cotton owns one of Canada’s only large-scale dye houses. Photo by Adetona Omokanye/BloombergIf that dye facility closes, Jerico won’t be able to dye and finish knitted fabrics at scale in Canada, said Salmaan Andani, managing director at Jerico. In Andani’s telling, manufacturers like his would be forced to source product overseas, and the country’s knitting and apparel manufacturing industry could unravel, link by link.Andani said the tariffs mean the company will likely to lose all of its US exports, which account for up to 10 per cent of sales. He has $22,000 worth of products ready to ship to the University of San Francisco, which ordered from Jerico because the institution wanted to support ethical, organic manufacturing, he said. It will now cost the school an extra $8,600 to receive the shipment, so the two parties agreed to put it on hold instead of cancelling.Redwood Classics Apparel is another Canadian manufacturer expecting a complete loss of U.S. sales, currently about 25 per cent of production. Kathy Cheng, an immigrant from Hong Kong, co-owns the business with her dad. A clothing wholesaler, Redwood has supplied brands such as Roots Canada and Holt Renfrew from its Toronto factory, which employs about 80 people.Cheng describes her operation as a “love story to Canada”: giving back to the community that embraced her family by insisting on manufacturing domestically. She wants Canadian corporations to choose Canadian partners, which can move the needle for a small business like hers. She said she doesn’t need to cut staff for now, thanks in part to more inquiries for corporate apparel orders from local firms.Cheng has also received order requests from longtime U.S. customers since the tariffs kicked in. But because neither side can absorb the 50 per cent surcharge, she, like Andani, has put these orders on hold. Kathy Cheng, co-owner of Redwood Classics Apparel. Photo by Adetona Omokanye/BloombergKevin Nixon runs a honey farm in southern Alberta and sells as much as half his production across the U.S. border. He shipped a few loads in early August in order to beat the tariff deadline.He doesn’t know if his U.S. buyers can absorb a 50 per cent increase in price, but said he can’t take the hit because his margins are already thin. Meanwhile, he’s trying to wrap up the harvest season and market this year’s crop. “We’re in limbo,” Nixon said. “It’s stressful.”For others, Canada’s counter-tariffs hurt more than the initial tariff blow.Cloverdale Paint Inc. makes industrial paint in British Columbia, but its steel cans are made in the US. As of Tuesday, those containers are subject to a 50 per cent levy, up from 25 per cent. Altogether, Cloverdale President Darrin Noble expects tariffs from both sides of the border to shrink profitability by 20 per cent, which will likely come out of the bonuses of the firm’s more than 1,100 Canadian employees. “It’s devastating,” he said. Honey farmer Kevin Nixon. Photo by Gavin John/BloombergNoble is asking the Canadian government for relief from the levy on imports of steel cans. Cloverdale benefited from a similar program instituted last March, during the first round of the trade war. That time, the support came through in a matter of weeks.Henry of Pelham Family Estate Winery expects the duties to kill all of its exports to the U.S. But Paul Speck, who owns and runs the business with his two brothers in St. Catharines, Ontario, counts himself as a winner of the trade war. Less than one per cent of his sales go to the U.S., and business jumped 25 per cent after the province banned U.S. alcohol, including wine, from government-controlled stores. In turn, Speck is switching to European providers for farm equipment that he used to buy from the U.S. Nixon Honey Farm sells as much as half its production across the border.Grassroots support is a familiar sentiment to Nixon, the honey farmer. Days after the tariffs went into effect, people from all over Canada began asking to buy a few jars to help out a Canadian business caught in the trade war.“I had people from Vancouver Island to Ontario emailing,” Nixon said. “We’ll work through it.” Join the Conversation This website uses cookies to personalize your content (including ads), and allows us to analyze our traffic. Read more about cookies here. By continuing to use our site, you agree to our Terms of Use and Privacy Policy.