Canadian Cities Most Affected by US Trade Tariffs
Just when interest rates are (finally!) coming down, horrible exchange rates and looming tariffs dash our hopes.
Oh Trump, What Are You Doing?
As of February 12, 2025, trade tensions between Canada and the United States have escalated significantly. On February 1, U.S. President Donald Trump announced a 25% tariff on all Canadian imports, citing concerns over illegal immigration and fentanyl trafficking. In response, Canadian Prime Minister Justin Trudeau declared retaliatory tariffs of 25% on U.S. goods totaling US$106 billion, targeting products such as lumber, plastics, and various consumer goods. Source: apnews.com
Following negotiations, both nations agreed to a 30-day delay in implementing these tariffs to seek a resolution. Canada committed to enhancing border security and intensifying efforts against fentanyl smuggling. Despite this pause, the U.S. imposed a 25% tariff on steel and aluminum imports from all countries, including Canada, on February 10. Source: reuters.com
The Bank of Canada has expressed concerns that a prolonged trade conflict could lead to a permanent reduction in Canada's GDP, increased inflation, and potential capital flight. The situation remains fluid, with ongoing negotiations aiming to prevent the full implementation of the proposed tariffs and mitigate economic disruptions. Source: reuters.com
Eastern Canada Taking the Brunt
The recent U.S. tariffs have significantly impacted several Canadian cities, particularly those with economies heavily reliant on exports to the United States. According to the Canadian Chamber of Commerce's U.S. Tariff Exposure Index, the cities in Eastern Canada are generally taking a harder hit than Western Canadian cities, but there are exceptions.
Read the full report on the Canadian Chamber of Commerce
Tariff Exposure Index Source: Canadian Chamber of Commerce
Shop Local & Support Local
One positive thing we've noticed over the last few weeks is the increasing "shop local" movement. It's always been important in my family since my wife and I both own businesses. We happen to live in an extremely entrepreneurial corner of Canada - the Okanagan Valley in BC. Half of everyone we know own a business. My own marketing agency (run with a friend) works with many companies across Canada, but many are concentrated in Western Canada, where we started 20 years ago. My wife is a part of her family's garden centre in Kelowna, British Columbia - the poster child of a local business. As the saying goes, local customers are our bread and butter.
But in a more literal sense, where are you buying your bread and butter?!
Everyone has an opinion on this!
In response to recent U.S. tariff announcements, Canadians are increasingly supporting local businesses and prioritizing domestic products. This movement is evident through various initiatives and consumer behaviours aimed at strengthening the national economy and reducing reliance on U.S. imports.
Government Initiatives:
- Buy Local, Buy Canadian Campaigns: Municipalities like Toronto have launched campaigns encouraging residents and businesses to purchase locally made goods. Toronto's city council has directed the development of a campaign to promote local spending, aiming to bolster the local economy and protect jobs. Source: canada.constructconnect.com
Consumer Behavior:
- Boycotts and Increased Patriotism: Many Canadians are boycotting American products and services, canceling travel plans to the U.S., and showing heightened support for Canadian-made goods. The hashtag #BOYCOTTUSA has trended on social media, reflecting widespread public sentiment. Source: politico.com
- Purchasing Canadian Alternatives: Consumers are actively seeking Canadian alternatives to U.S. products. For instance, the "Buy Beaver" app allows users to scan product barcodes to determine how Canadian a product is, encouraging informed purchasing decisions that favor domestic goods. Source: betakit.com
Business and Community Responses:
- Support for Local Enterprises: In our own city of Kelowna, the Chamber of Commerce is opening discussions on what to do about looming U.S. tariffs on Canadian goods.
The Chamber will host a forum with industry leaders on Wednesday, March 5 from 2 p.m. to 3:30 p.m. at UBC Okanagan. Read more on Castanet.net
Who makes your bread? And where are you buying your peanut butter and jelly?
Final Thoughts
I am certainly no expert on this topic. I'm just a normal business owner who knows things about marketing; definitely not politics. In fact I tend to limit my "screen time" for news and politics quite a bit, viewing it somewhat like Facebook or Instagram that sucks you in and splits you out 3-4hrs later if you let your guard down.
Just like the COVID years, some businesses will actually prosper, while others nose-dive. Because our company works in so many industries we saw both happen in 2020-2021. I'm guessing the same thing will happen this year. Ignoring the odd silver-lining, it seems like a ton of extra stress that nobody wants.
What I do hope for is this to all be over soon. I hope our nations' leaders resolve issues without resorting to playground bully tactics and economic whips and lashes... that feel like, er... whiplash. I think Canada and the US are like different departments in the same company (Sales & Marketing for example), and we are stronger working together. Mexico too, for that matter. We're all in this cool company called North America.
Canada and the USA go together like a peanut butter & jelly sandwich–American peanuts & Canadian berries of course!
Over and out,
James Shaw, Creative Director, Twin Creek Media
PS. Make trade love, not trade war. Sorry, couldn't resist!