^{Source: Yahoo Finance}

Trade Tensions Hit Close to Home

When former President Donald Trump launched a series of tariffs targeting key U.S. trade partners, the aim was to recalibrate the global trade balance and revive American manufacturing. But for small businesses just across the Canadian border, the impact wasn’t just financial—it felt personal.

In 2024, trade between the U.S. and Canada reached an astonishing $762.1 billion, highlighting just how interwoven the two economies are. Canada exports more than 75% of its goods to the U.S., while American imports make up nearly 50% of Canada’s total imports, according to the Office of the United States Trade Representative (USTR).

That symbiotic relationship has been severely tested since March 2024, when the Trump administration imposed sweeping tariffs:

• 10% on Canadian energy exports
• 25% on other select imports
• 25% on vehicles not assembled in the U.S., affecting major automakers in both Mexico and Canada
• 25% on auto parts, set to take effect shortly after

While exemptions were granted to some goods under the United States-Mexico-Canada Agreement (USMCA), the damage was already done—especially to trust.

A Crisis of Confidence: The Emotional Toll on Canadian Entrepreneurs

“For many Canadians, it wasn’t just an economic decision—it felt like a slap in the face,” said Corinne Pohlmann, Executive Vice President of Advocacy at the Canadian Federation of Independent Business (CFIB), which represents over 100,000 small businesses across 12 provinces and territories.

According to a CFIB survey conducted in March 2025, over 50% of members believe the U.S. is no longer a reliable trading partner. Roughly 25% of businesses reported a noticeable shift in consumer behavior, with stronger demand for Canadian-owned products—a reflection of growing national pride and economic self-defense.

More than 48% of CFIB members are involved in cross-border trade, whether directly or via supply chains. As tariffs inflate costs, entrepreneurs are forced to choose: absorb the expenses, pass them on to consumers, or shift to alternative partners.

Symbolic Resistance: Coffee Cups, Grocery Aisles, and Liquor Shelves

The resistance isn’t just happening in boardrooms—it’s happening in grocery stores and coffee shops.

Take Balzac’s Coffee Roasters, a beloved Ontario-based chain. In a cheeky but meaningful move, they’ve renamed the traditional Americano to the Canadiano, a small symbolic gesture that reflects a larger sentiment: Canadian first.

Then there’s Your Independent Grocer, a supermarket chain under Loblaw Companies. They now label items “Prepared in Canada” with a proud maple leaf and highlight tariff-impacted products with a bold “T” logo both in-store and online.

But perhaps the most striking move came from the Liquor Control Board of Ontario (LCBO). As of March 4, 2025, LCBO halted purchases of American-made products, including iconic brands like California wines and Tito’s Vodka. In its Niagara-on-the-Lake location, signs read:
“For the good of Ontario, for the good of Canada.”

Interestingly, products made in Canada—even if U.S.-owned—are still allowed. For instance, Molson Coors, a U.S.-Canadian beer giant, produces Coors Light within Canada.

“While we are a global business, our beers and beverages are generally made in the markets in which they are sold,” said Rachel Gellman Johnson, Senior Director of Communications at Molson Coors.

Beyond the Ledger: A Fractured Foundation of Trust

While tariffs are traditionally seen as tools of economic strategy or “hard power,” the fallout in Canada underscores a deeper concern—soft power erosion.

Former U.S. Secretary of State Antony Blinken expressed this concern in a CNBC interview, noting:

“If we not only see China try to build soft power, but simultaneously cede our own... that’s not good for America or our interests.”

Once-strong U.S.-Canada partnerships are now under scrutiny. Some Canadian businesses are renegotiating contracts, shifting supply chains, or severing long-term relationships altogether.

“We’ve seen members ask how to rewrite contracts or restructure deals to reduce dependency on U.S. suppliers,” Pohlmann shared.

Looking Ahead: A Cautious Future

Even if future U.S. administrations repeal or reduce tariffs, the scars remain. Business owners across Canada are now prioritizing diversification, not just out of necessity but out of caution.

“There’s been a fundamental shift,” Pohlmann said. “Even with a permanent reprieve, the trust has been broken. For many, it may never fully recover.”

Added Insight: The Bigger Picture

Additional data from Global Affairs Canada shows that Canada’s trade diversification strategy has picked up speed. In 2024:

• Exports to the European Union rose by 14.3%
• Exports to Asia-Pacific markets grew 9.7%, led by demand from South Korea and India
• The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) has led to stronger ties with Australia, Japan, and Vietnam

Meanwhile, Canadian small businesses are leveraging e-commerce platforms and exploring local manufacturing to reduce exposure to volatile trade relationships.

A Turning Point for Canadian Trade Identity

Trump’s tariffs may have been aimed at recalibrating America’s economic position, but they also served as a wake-up call for Canada’s small businesses. What began as policy enforcement has evolved into a cultural moment—a resurgence in national pride, innovation, and strategic independence.

For Canadian entrepreneurs, the message is clear: they’re ready to stand on their own terms—even if that means turning the Americano into a Canadiano.

‍

‍