Canadian businesses seek certainty in the U.S. tariff war

Deal or no deal, Wes’ love wants is certainty.

His Toronto-regional business, Taurus Craco, imports machinery from overseas and distributes it in North America (mostly the United States).

But President Donald Trump’s ever-changing tariffs on Canadian products have left him like many independent business owners unable to plan for the future.

“What creates hesitation in the market is that people don’t know what approach this will be taken,” Mr Love told the BBC in June.

“In small businesses, hesitation is the killer.”

Taurus Craco was hit by tariffs earlier this year when it was forced to sell nearly 35,000 Canadian dollars ($25,500, £18,700) as freight to the United States crossed the border a few minutes after a deadline.

“It’s totally punitive. From a small business perspective, that’s far more than what we spend on hydraulics and gas throughout the year,” he said.

Although Trump stopped, and Taurus Craco still had to pay for the tariffs a few hours later. Rejection means no longer allowing its products to be shipped to the United States, Love said.

“It’s like dealing with a mob,” he said.

Canada is fighting a rival tariff war with its largest trading partners, facing a range of levies, especially metals and cars.

Since taking office in January, Trump has announced a series of import taxes on goods from other countries – believing that they will promote U.S. manufacturing and protection efforts.

The ensuing uncertainty hit Canada’s economy, and fierce negotiations between the two countries encountered obstacles on Friday.

Prime Minister Mark Carney called Trump’s tariffs “unjust” and said during his campaign for the April election that the “old relationship” with the United States is “end.”

Shortly after winning the election, the Prime Minister visited Washington, D.C. to send a more reconciliational message to the White House, launching talks on a new trade and security agreement.

Since then, the July 16 deadline has been set to reach the deal, and President Trump said at the recent G7 summit that he is optimistic that the two countries can “resolve” in trade.

But on Friday, Trump said he was in trade talks on Canada’s digital service tax.

“We hereby terminate all discussions on trade with Canada and will take effect immediately,” he wrote on social media.

Carney threatened to impose another round of retaliatory tariffs on the United States if the negotiations were not successful.

Mr. Love welcomes the prospect of any deal.

“Give us a set of rules, let them be alone, let us operate within these rules,” he said.

“It’s like sports, right? Everyone gets into the field and you can follow a set of rules, but you don’t change the rules in the middle of the game.”

Gaphel Kongtsa, director of international policy at the Canadian Chamber of Commerce, said companies hope that a deal would lead to stability.

So far they have had to browse the very smooth landscape, “in the case where things seem to increase, decrease or increase or increase, there is no clear indication of the reason”.

According to Statistics Canada, Canada relies heavily on trade with the United States, with its exports accounting for 75% of the south.

According to the Canadian Federation of Independent Enterprises (CFIB), its economy slowed significantly in the first quarter of 2025 due to the trade war and the consequent uncertainty – growing only 0.8% between January 1 and March 31.

It shrank by 0.1% in a month in April.

The tariff schedule shows a whirlwind of months.

On February 1, Trump imposed a 25% tariff on most Canadian imports, and then suspended it a month later. When the deadline expires, they are re-imposed, just delayed.

Soon after, he exempted all commodities that comply with the current NAFTA (called the USMCA).

Then, in March, the United States imposed a 25% global tariff on imported steel and aluminum and imported vehicles.

This month, Trump raised metal tariffs to 50%.

Manufacturing has been in the spotlight when it comes to tariffs, but the service sector is also affected by uncertainty, if not directly by levies.

Sam Gupta is the founder and CEO of Everatiq, a technology and management consulting firm that operates in Buffalo, New York, and Toronto.

Mr Gupta said most people do not consider the service sector during times of uncertainty, calling it an “unpopular stepchild” of the economy.

“Be aware of the attention of all manufacturing companies and companies directly affected by the supply chain,” he said.

However, the service – Covering everything from finance to tourism – accounts for a large part of the Canadian economy, which accounts for the vast majority of its labor force.

Service exporters have not been hit hard as hard as manufacturing, but their outlook and confidence in the market are at the lowest levels in years, according to the Canadian Chamber of Commerce.

Although Ottawa has taken several measures to mitigate relief from companies subject to tariffs – including funds for violations, the service department has not received any compensation.

“We are not even in the conversation,” Mr. Gupta said. “We don’t exist.”

He said his business is not struggling financially at the moment, but noted that inquiries about his company’s services “a 50% decline.”

“As far as we understand, there aren’t many businesses thinking about these long-term investments right now. It’s just that they’re just mentally.”

“The biggest fear that all of us have right now is that I don’t know how long it will take. If it’s going to take six months, one year, 18 months, we can still survive. But, assuming that lasts two years, three years, then my god, my god, that’s going to be very hard.”

He said it was the toughest time for the industry in his 20-year career as a combination of challenges facing the industry.

Mr. Gupta recalled the ease with which he received a high-paying job early in his career.

“Even if I’m graduating, we’re going to pay frantically. We’re so arrogant that we won’t even take calls from recruiters,” he said.

“But now with AI, tariffs, economy, everything, everyone I know is struggling,” he said.

Statistics Canada reports that 56% of all business exported to the United States have taken steps to mitigate the impact of tariffs.

More than 30% postponed significant investments and spending, while 25% sought other customers outside the U.S.

Bank of Canada said on Wednesday that exports to the U.S. fell by more than 15% in April. Steel and aluminum exports fell by 25% and 11%, while vehicle exports fell by 25%.

But despite everything, Mr. Love is still very positive.

He said that as long as the United States does not continue to change its trade policies, businesses can meet the challenges.

“We are entrepreneurs. As they said, we are full of urination and vinegar.”

“So we’re doing everything we can to keep fighting. I think we’ll succeed; we just need to know what the basic rules are.”