The proposed 50% US tariff on certain Canadian goods, which could take effect next Wednesday, is raising significant concerns among small exporters, according to new research from the Canadian Federation of Independent Business (CFIB) released Wednesday.
Two in five surveyed Canadian exporters say their products would be hit by the tariffs, while 77% of affected firms expect revenues to fall if they come into effect, said CFIB. More than a third anticipate a decline of at least 50%.
Overall, more than nine in 10 Canadian exporters to the US are concerned about the proposed tariffs, with 32% saying they are extremely concerned, added CFIB.
"Most of these businesses have been operating under the long-standing assumption that CUSMA-compliant goods would remain tariff free," Dan Kelly, CFIB president. "The prospect of losing sales, slashing prices, or having to pivot to new markets altogether, is generating a lot of small exporter anxiety in the lead-up to August 19."
The businesses most exposed include those selling machinery and equipment, wood and building products, plastics and packaging, agricultural and food products, as well as arts and creative goods, according to CFIB.
Canadian and US officials are holding talks to renew the US-Mexico-Canada Agreement (USMCA), or CUSMA as it's known in Canada, on trade.