A close-up of a “Canadian Shop” poster on April 4, 2025, displayed in a local storefront in Edmonton, Alberta, Canada.
Artur widak | nuphoto | Getty Images
Crossing the US-Canadian border, some small businesses are personally subject to tariffs.
President Donald Trump said his wide-sweeping tariffs would readjust international trade and bring manufacturing back into the state, even some of the country’s closest trading partners. But for our Northern US neighbors, tariffs can mean erosion of trust.
The country’s trade relationship with Canada has historically been essential to both national economies. In 2024, trade in goods between the two countries totaled $762.1 billion. Canada exported three-quarters of its goods to the United States last year, with US imports making up almost half of all goods brought in, according to the US Trade Representative.
However, since March, the Trump administration has implemented a 10% tariff on Canadian energy and a 25% tariff on other imports from Canada and Mexico. However, he exempts many imports covered by the US-Mexico-Canada agreement.
Trump also put a 25% tariff on unassembled vehicles in the US, which came into effect earlier this month. It is two major automotive production hubs that have impacted both Mexico and Canada. Additionally, a 25% tariff on auto parts is set to take effect next month.
Canada responded with its own retaliatory tariffs, but the pride of its citizens sparked a different kind of resistance.
Balzac’s coffee roaster highlights Canadian patriotism with its café menu.
Matthew Microute | CNBC
Balzac’s coffee roaster, a chain of Ontario and Toronto cafes, responded to trade tensions with a renamed menu item.
Independent grocery stores, a chain of independent supermarkets, is a chain of supermarkets under the Canadian-winning Lobrow company, using its own maple leaf badges to show products “prepared in Canada.” Grocery stores also show tariff-affecting items with a “T” logo in stores and online.
Aisle of a separate grocery store in Niagara-on-the-Lake, Canada.
Cameron Costa | CNBC
Corinne Pohlmann is the Vice President of the CFIB’s Canadian Independent Business Federation, representing over 100,000 small businesses in 12 of 12 in 13 regions and provinces.
According to the organization’s December 2024 survey, approximately half of CFIB members are directly involved in imports or exports from the United States. That metric does not include dependencies on suppliers or customers that are dealing with the US
More than a quarter of CFIB members surveyed in late March reported strong demand for Canadian-owned products. More than half of the companies surveyed agreed that the US is not a reliable trading partner.
When the entrepreneur decides which side of the border will absorb the costs of the new tariffs, she said the trade tensions have extended to years of relationships between us and Canadian small businesses. Pohlmann recalled some of the CFIB members seeking guidance on how to renegotiate contracts with Southern partners.
Paulman said tariffs are causing emotional distress, in addition to increasing costs.
“For many Canadians, it felt like a betrayal,” Paulman said.
The Ontario Liquor Commission has suspended purchasing of US products from March 4th. The LCBO retailer at Niagara-on-the-Lake Display describes the disappearance of US-made products such as California wine and Tito’s Bodoca with a sign that reads “For the benefit of Ontario, for the benefit of Canada.”
Workers will remove a bottle of American wine from the liquor committee shelf at the Ontario (LCBO) Queen’s Key Store in Toronto, Ontario, Canada on Tuesday, March 4, 2025.
Christopher Katarov Lunna | Bloomberg | Getty Images
However, it’s not always a clear cut.
A representative from LCBO Press has made it clear via email to CNBC that products made in Canada are OK with Grace Shelf, regardless of their ownership.
Molson Coors has production facilities in both Canada and the US
“We’re a global business, but our beers and drinks are made in a commonly sold market,” said Rachel Gellman Johnson, senior director of communications at Molson Coors.
Tariffs are usually a tool for “hard power” and encourage geopolitical change through coercion. The US’s longstanding relationships with trading partners such as Canada, Mexico and Japan have strengthened the country’s impact on global stages.
Beyond the numbers, it could be a US influence, or what is called “soft power,” and it could be a hit.
Former Secretary of State Antony Blinken told CNBC’s Andrew Ross Sorkin this month that the blow to the country’s soft power is his biggest fear in today’s environment.
“The idea that China will not only try to develop more soft power, but we will give ourselves away… not good for the country, not good for our interests,” Blinken said.
Even if President Trump reduces tariffs, Canadian companies may be hesitant to restructure business relationships with US partners. CFIB’s Pohlmann pointed out the loss of the contract, eroding trust.
“We welcome a permanent reprieve from tariffs, but the Canadian-US business relationship has been broken and may not be the same again,” Paulman said.
