Canadian Small Enterprises Are Feeling the Impact of Trump’s Tariffs on a Personal Level

Close-up of ‘Shop Canadian’ poster displayed in a local storefront in Edmonton, Alberta, Canada, on April 4, 2025. Artur Widak | Nurphoto | Getty Images

Just across the U.S.-Canada border, some small businesses are taking tariffs personally.

President Donald Trump has stated that his wide-ranging tariffs, even on some of the country’s closest trade partners, will rebalance international trade and reinvigorate domestic manufacturing. However, for Canada, these tariffs may erode trust.

The trade relationship between Canada and the U.S. has historically been vital for both economies. In 2024, the trade of goods between both nations totaled $762.1 billion. According to the Office of the United States Trade Representative, Canada exported over three-quarters of its goods to the U.S. last year, while U.S. imports accounted for nearly half of all goods it received.

Starting in March, however, the Trump administration implemented a 10% tariff on Canadian energy and 25% tariffs on other imports from Canada and Mexico, a levy he promised on Inauguration Day. Notably, many imports covered under the United States-Mexico-Canada Agreement were exempted.

Additionally, Trump imposed a 25% tariff on vehicles not assembled in the U.S., impacting both Mexico and Canada, which are significant auto production hubs. A 25% tariff on auto parts is scheduled to take effect next month.

Canada has responded with its own retaliatory tariffs, but national pride has evoked a different form of resistance.

Balzac’s Coffee Roasters highlights Canadian patriotism on its cafe menus. Matthew Mikrut | CNBC

Balzac’s Coffee Roasters, a chain of cafes across Ontario and Toronto, has renamed a menu item in light of the trade tensions: the Americano, a common espresso drink, is now proudly called the “Canadiano,” marked with a maple leaf.

Your Independent Grocers, a chain of independently owned supermarkets under the Canadian-traded Loblaw Companies, displays its own maple leaf badge to indicate products “prepared in Canada.” The grocer also labels tariff-impacted items with a “T” logo in-store and online.

Aisles at Your Independent Grocer in Niagara-on-the-Lake in Canada. Cameron Costa | CNBC

Corinne Pohlmann, the executive vice president of advocacy at the Canadian Federation of Independent Business (CFIB), represents over 100,000 small businesses across 12 of Canada’s 13 provinces and territories. According to CFIB’s December 2024 survey, about half of its members are directly involved in importing or exporting from the U.S., without factoring in those with reliance on suppliers and customers engaged in U.S. trade.

More than a quarter of CFIB members surveyed in late March indicated an increased demand for Canadian-owned products. Over half of the surveyed businesses expressed concern that the U.S. is not a reliable trading partner. The trade tensions have strained long-standing relationships between U.S. and Canadian small businesses, with some entrepreneurs reevaluating which side of the border will absorb the costs of new tariffs. Pohlmann noted that some CFIB members sought advice on renegotiating contracts with southern partners.

Pohlmann emphasized the emotional impact of the tariffs, stating, “For a lot of Canadians, it felt like a betrayal.”

The Liquor Control Board of Ontario halted its purchases of U.S. products starting on March 4. The LCBO retail store in Niagara-on-the-Lake prominently displays signage stating, “For the good of Ontario, for the good of Canada,” explaining the absence of U.S.-made products like California wines and Tito’s Vodka.

A worker removes bottles of American-made wine from a shelf at the Liquor Control Board of Ontario (LCBO) Queen’s Quay store in Toronto, Ontario, Canada, on Tuesday, March 4, 2025. Christopher Katsarov Luna | Bloomberg | Getty Images

However, the situation is not always straightforward. An LCBO representative clarified that any product made in Canada, such as locally produced Coors Light beer, is still acceptable for sale, regardless of the company’s ownership. Molson Coors operates production facilities in both Canada and the U.S.

“While we are a global business, our beers and beverages are generally made in the markets in which they are sold,” said Molson Coors Senior Director of Communications Rachel Gellman Johnson.

Tariffs are generally considered a tool of “hard power,” intended to prompt geopolitical change through coercion. The U.S.’s long-standing relationships with trading partners like Canada, Mexico, and Japan have strengthened its influence on the global stage.

Apart from the economic implications, U.S. influence—often described as “soft power”—may also suffer. Former Secretary of State Antony Blinken recently expressed concern to a prominent media figure, stating that a decline in U.S. soft power is troubling. “If we allow China to expand its soft power while we cede our own… it’s detrimental to the country and our interests,” he remarked.

Even if President Trump reduces tariffs in the future, Canadian businesses might remain cautious about rebuilding trading relationships with U.S. partners. Pohlmann highlighted the long-term impacts of lost contracts and diminished trust, stating, “While we’d welcome a lasting reduction in tariffs, the trading relationship between Canada and the United States has been fractured and may never be the same again.”