Tariffs of 25% would be catastrophic for these Canadian puppets

It is in the middle of dozens of boxes of puppets that Jacob Slan, manager of the company Cate and Leviis preparing the next orders of puppets and stuffed animals, the majority of which will be sent to the American market.

I would say about 85% of our sales are in the United States right now, and it’s always been about that balance and that volumehe emphasizes.

The imposition of 25% tariffs on Canadian products, a threat brandished by President-elect Donald Trump, would have catastrophic consequences on small Canadian businesses like that of Jacob Slan.

We are very worried. […] If customs duties are imposed, it will have a very significant impact on us as a Canadian manufacturer.

And for small businesses like Cate and Levithe imposition of customs tariffs of 25% on all Canadian products exported to the United States would represent a major challenge, particularly in terms of production costs.

Our costs are higher than some overseas manufacturers, which means our margins are quite low. Therefore, any change of 25% or even a smaller change of 10% to the overall customs tariffs would have a huge impact on ushe fears.

I hear people worrying every day about what might happen.

Donald Trump first talked about imposing 10% tariffs during the presidential campaign before increasing that figure to 25% for Canada and Mexico following his election.

Jacob Slan, who maintains relationships with hundreds of stores in the United States and Canadareports that the latter are expressing more and more concerns about the economic impacts of this decision.

A merchant told me today that he was going to postpone his order until he had a clearer idea of ​​what was happening with the customs dutieshe says.

This uncertainty complicates decision-making for many Canadian companies, which must constantly adjust their strategies to fluctuations in American trade policies.

The only solution is inflationary

Although Jacob Slan acknowledges that Cate and Levi East almost at the mercy of the markets and Trump’s decisionshe is exploring solutions to minimize the potential consequences that could impact his puppet business.

If we were forced to do so, we would have to raise our prices to compensate for the tariffs and that would hurt our overall production, but that is the only thing we could do and still sell to the United Stateshe says.

Offsetting the costs of tariffs with an increase in prices obviously risks fueling inflationnotes Jasmin Guénette, vice-president of national affairs at the Canadian Federation of Independent Business (FCEI).

It is workers and consumers who will pay the price.

This strategy could have negative repercussions on purchasing power with a tariff war which will increase prices on both sides of the borderhe warns.

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The Canadian government must ensure that it does not directly or indirectly impose new high costs on businesses so that they do not, on the one hand, have to deal with high American tariffs and, on the other hand, thereby, at high Canadian pricesadds Jasmin Guénette.

Faced with the economic challenges ahead, Jacob Slan is considering other export alternatives to ensure the sustainability of his business.

Eventually explore other markets, sell more in Canada, but also abroad. In the past we have sold worldwide, but shipping costs have been a challengehe remembers.

Canada has concluded several trade agreements with other countries, but the American market remains the most profitable, the closest, the one which is often the most accessiblerecalls Jasmin Guénette.

This privileged relationship, marked by strong geographic proximity and solid economic ties, makes the United States a key destination for Canadian exporters.

Even with the imposition of 25% tariffs, the United States would remain the leading destination for Canadian exportsestimates Yan Cimon, professor of strategy at Laval University.

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Ontario is one of the provinces that exports the most to the United States, according to data (New window) of the Directorate General of the Treasury and the regional economic service of Ottawa.

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It is one of the provinces most dependent on its commercial relations with the United States. These businesses will therefore have an additional challenge compared to those in other provinces.adds Yan Cimon.