US President Donald Trump’s imposition of a 25% tariff on imports from Canada is being met with grave concerns by various business groups and organizations across Canada.
Economic forecasts predict that these tariffs could lead to increased consumer costs and widespread economic repercussions, affecting industries such as automotive and agriculture. The Bank of Canada has already reduced its benchmark interest rate, warning of significant economic repercussions due to the potential trade conflict.
Here’s how various groups have reacted to the ‘trade war’
Dan Kelly, President, CFIB
Corinne Pohlmann, Executive Vice-President, Advocacy, CFIB
“The 25% tariffs on Canadian products, announced by President Trump, are deeply disappointing and will hit small businesses hard on both sides of the border. It shouldn’t have come to this.
Trade is not just a big business issue – over half (51%) of Canada’s small business are involved in importing or exporting directly with the U.S. Should Canada respond with tariffs of our own, small firms – already operating on razor-thin margins – will have no choice but to raise prices. This will lead to even weaker consumer demand. While we recognize our government will need to respond, we urge government ensure any Canadian tariffs avoid broad impacts on Canadian SMEs.
As President Trump has plans to cut red tape and reduce taxes, Canadian governments will also need to make sure our small businesses are well-equipped to stay competitive with their American and global counterparts. Now is the time to reduce taxes and red tape and implement a mutual recognition agreement to address internal trade barriers.
If US tariffs are in place for a longer period, governments should ensure any support programs do not repeat the mistakes of pandemic support programs like CERB. Any business supports should focus on the needs of small businesses – not just large exporters. We need to remember that many small businesses remain deeply in debt from the pandemic restrictions and the current political and economic uncertainty makes this period even more challenging.”
As U.S. tariffs edge closer to reality, Canada finds itself caught in a high-stakes dilemma over whether to retaliate given its uniquely deep economic reliance on the market south of the border.
“There is a clear imbalance of power and sadly, we are on the wrong side of it,” says CPA Canada’s chief economist, David-Alexandre Brassard.
The ramifications for both countries could be severe, with inflationary risks rising in the U.S. as Canadian and Mexican goods and services account for a quarter of American imports,” says Brassard. A 25 per cent tariff on these would undoubtedly increase costs for American consumers—and impair the competitiveness of Canadian businesses.
“If Canada retaliates to inflict economic damage on American businesses in the hopes of the U.S. lifting the tariffs faster, it would also hurt Canadian consumers,” says Brassard.
“The balancing act between economic growth, inflationary pressures and trade retaliation presents a significant challenge.”
If tariffs are implemented, Canada’s GDP could fall by more than two percentage points, putting more than 500,000 jobs at risk, particularly in energy and manufacturing sectors. Additionally, inflationary pressures would likely increase on both sides of the border, undermining the price stability that both countries are working to rebuild.
Candace Laing, President and CEO, Canadian Chamber of Commerce
“President Trump’s profoundly disturbing decision to impose tariffs will have immediate and direct consequences on Canadian and American livelihoods. Tariffs will drastically increase the cost of everything for everyone: every day these tariffs are in place hurts families, communities, and businesses.
Canada has been a safe, secure and reliable trading partner to the U.S. for decades. Whether it’s our crude oil that is practically perfect for the North American autos we build together, the potash that supports the agriculture that feeds America, or the critical minerals and other inputs that go into everyday essentials like washing machines and refrigerators, America needs Canada. Our supply chains are so deeply integrated that you can’t unwind them overnight. They are integrated not simply because we get along as neighbours, but because it makes sense financially for businesses and consumers on both sides of the border.
Which is why if President Trump truly wanted to bring down costs for Americans, he would be looking at strengthening our trade ties, not tearing them apart. This decision makes no sense when the majority of Americans oppose tariffs, when it harms businesses and workers on both sides of the border, and when the U.S. stock market is signaling that there’s no appetite for disruption.
Right now, job number one for Canada is providing security to the Canadian families, communities and businesses that are rightly scared by the consequences of President Trump’s self-defeating measures.
Until we can make President Trump and U.S. decision makers understand the enormity of the Canada-U.S. relationship, Canada needs to focus on what we can control here at home to build a more resilient economy and restore as much stability to Canadians as possible. If we can’t trade south, let’s diversify our trading partners and dismantle unnecessary internal trade barriers to keep goods and services flowing north, east, and west. A strong, united, and competitive Canadian economy will thrive no matter what gets thrown our way.”
Kelly Higginson, President and CEO, Restaurants Canada
The Canadian restaurant and foodservice industry is deeply concerned about the 25% tariffs announced by President Trump. These tariffs, along with retaliatory measures, threaten jobs, increase operational costs, and will raise prices on both sides of the border, impacting the daily lives of Canadians and Americans.
We support the federal government in doing everything in its power to protect Canada’s interests and resolve the dispute as quickly as possible. The Canadian and U.S. food production and foodservice industries are deeply intertwined, so any action that affects one will inevitably hurt the other.
We urge the government to consider exempting food and food packaging from retaliatory tariffs, as these essential, perishable items will only exacerbate inflation. The foodservice industry, valued at $120 billion, is the 4th largest employer in the country, employing 1.2 million people across small and medium-sized businesses in every community. Our industry is very vulnerable to cost increases after a challenging five years and is still facing significant debt and inflationary pressures from the pandemic.
If the trade dispute results in major and sudden job loss, we urge the government to prioritize job retention through wage support, like it did during COVID, rather than immediately resorting to EI measures. Direct support will protect workers, sustain businesses, and reduce pressure on food banks, enabling recovery once the tariffs are lifted.
We are meeting with key cabinet ministers and their staff early this week to discuss the impact on our industry and ways to mitigate it, while still making sure Canada’s response is impactful. We are also collaborating with Premiers across Canada to immediately address interprovincial trade barriers, increasing our ability to buy Canadian and supporting economic growth.
Premiers can help the restaurant industry adjust to the challenges ahead by deepening alcohol wholesale discounts, especially in provinces like Ontario, where American products are being pulled off the shelves of liquor distributors.
We will continue to monitor the situation, providing updates on the effects of U.S.-led tariffs and Canadian retaliatory measures on the foodservice industry, while considering the long-term diplomatic implications for Canada-U.S. relations.
“Canada must retaliate swiftly and definitively to the unjust imposition of a sweeping 25% tariff on Canadian goods and 10% tariff on energy imported to the United States, says Unifor.
“With the implementation of these tariffs, President Trump has declared a trade war with Canada and with Canadian workers,” said Unifor National President Lana Payne. “Trump’s decision to go to battle with America’s largest trading partner will hurt working people on both sides of the border and inflict real economic damage to both countries.”
The U.S. tariffs are reportedly scheduled to come into effect on Tuesday February 4, 2025.
“I believe Trump has underestimated Canadians. He has failed to realize that he has enraged and united an entire nation that is ready to fight to defend every last job in this country,” said Payne. “We will never forget this act of hostility against our workers, and we must take every measure possible – utilize every ounce of creativity we have – to build a strong, resilient, and diverse economy to never be held hostage by America again.”
Payne, a member of the Prime Minister’s Council on Canada-U.S. Relations, has called for a strong response to tariffs in addition to other measures including Buy Canadian protocols, leveraging procurement policies to support Canadian jobs and industries and better management of strategic national resources through industrial policy.
Unifor has also called for enhanced income supports for workers with improved access to Employment Insurance benefits and emergency relief programs to mitigate risk of layoff and sustain companies in their operations.
Read Unifor’s recommendations to protect jobs and shore up the economy here.
Unifor is Canada’s largest union in the private sector, representing 320,000 workers in every major area of the economy. The union advocates for all working people and their rights, fights for equality and social justice in Canada and abroad, and strives to create progressive change for a better future.”
“The Calgary Chamber and our members are deeply concerned by the tariffs announced today and the severe consequences they will have on businesses and workers across the country.
“We have been clear: tariffs are bad economic policy — whether imposed by the U.S. or as retaliation — with the consequences borne by Canadians, Americans and businesses on both sides of the border,” says Deborah Yedlin, President and CEO of the Calgary Chamber of Commerce. “We strongly encourage the federal government to focus on diplomacy and de-escalation and avoid further blows to our economy through retaliation.”
Retaliation should be seen as a last resort option, particularly given Americans will feel the impact of President Trump’s tariffs on a daily basis when they buy groceries and fill up their cars: Americans are likely to see up to a 30c/gallon price increase at the gas pumps, many of the eight million jobs in the U.S. tied to trade with Canada may be compromised, and their industries, many of which rely on Canadian inputs, will be hamstrung.
The economic impact will ripple through key industries on both sides of the border — from manufacturing and agriculture to energy and technology — undermining the competitiveness of Canadian businesses and weakening our position in the global market. And with 42% of exports to the U.S. coming from small businesses, we’re concerned about the impact to our SMEs, which account for 98% of Canada’s businesses.
In the face of this challenge, we call upon Canadian policymakers to act decisively and strategically. We believe three critical areas demand immediate attention:
The first is to build relationships. We must strengthen engagement with U.S. counterparts to de-escalate tensions and preserve our vital trade relationship. Diplomacy and collaboration must be prioritized to avoid punitive measures that harm both nations. A breakdown in this relationship risks long-term damage to our shared economic prosperity. Given the importance of the U.S. market to the Canadian economy, what we don’t want is for this to go on too long so that substitutes to Canadians goods are found by U.S. companies and consumers.
The second is to strengthen Canadian competitiveness. We must address internal barriers, including interprovincial trade restrictions — including supply management — to enhance our domestic market efficiency. Simultaneously, we must remove punitive measures that undermine our industries and work to level the playing field globally. These include policies such as the emissions cap, amendments to the Competition Act and others. Without action, tariffs will erode our ability to compete internationally, putting Canadian jobs and businesses at risk.
The third is to build for the future. This means we need to secure market access, advance critical infrastructure such as pipelines and align defence spending with our commitments to NATO. These steps will ensure Canada remains a resilient and forward-looking economy. Failure to act now will leave us vulnerable to future economic shocks and limit our ability to capitalize on emerging opportunities.
“We acknowledge the efforts already underway by policymakers and businesses on these fronts,” says Yedlin. “But we hope that this is seen and heard as a wake-up call. We’re at an inflection point: now is the time for a unified Team Canada approach — businesses and governments must lean into collaboration to navigate this challenge and secure our shared prosperity, and consumers can support by buying local and buying Canadian.”
Brad Parry, President and CEO, Calgary Economic Development.
“Calgary always has been and always will be the energy capital of Canada. Energy is the foundation of the Canada-U.S. trade relationship and a tariff on Canadian oil — while lighter than initially proposed — is a direct hit to both the Canadian and U.S. economies. These tariffs will drive up costs for American consumers and threaten investment and jobs in Calgary and across Alberta.
“These sweeping tariffs will disrupt supply chains, increase business costs and inject instability into our economy. Alberta’s manufacturing, agriculture and export-driven industries — already navigating economic headwinds — will face further uncertainty, making it harder for companies to compete and grow. Small businesses, which make up almost 95 per cent of Calgary’s business environment, would be particularly vulnerable.
“Calgary Economic Development will continue to work with industry, policymakers and trade partners to mitigate the impact of tariffs and strengthen investment in high-growth sectors. At the same time, we will double down on efforts to diversify our international markets while increasing interprovincial trade to strengthen our economic resilience against protectionist policies.”
Related Retail Insider stories:
