'Half my business will be gone' - firms in Canada and US fear trade war
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'Half my business will be gone' - firms in Canada and US brace for trade war fallout
Image source: Jason S Anderson
Image caption: Most of Cindy Baldassi's US sales will be wiped out, she says
By Ana Faguy in Washington
Published 1 hour ago
Cindy Baldassi relies on American buyers to keep her stone-and-glass jewellery company going. Some 75% of sales of pieces including amethyst, sea glass and agates from her business, CindyLouWho2, based in Calgary, Alberta, come from Americans. But after trade talks between the US and Canada collapsed over the weekend and leaders of both countries pledged to slap 50% tariffs on each other's products, business owners on both sides of the border are preparing for the consequences.
With a majority of the items she sells now subject to US President Donald Trump’s newly imposed tariffs, Baldassi says she will need to increase prices by 50% to remain profitable. "It's quite likely that it will wipe out most of my US sales," Baldassi told the BBC. "I expect that at least half of my business will be gone."
Canadian Prime Minister Mark Carney has announced levies starting on 8 September on US steel, dairy, appliances and electronics. Trump tariffs went into effect on Saturday, impacting Canadian wine, dairy, cement, clothing, and hockey equipment.
'We may get killed'
In Canada, the full extent of the impacts remains to be seen, given the country's previous experience with sporadic trade skirmishes. Lind Furniture, a business based in Ontario that has been operating for almost 60 years, selling leather furniture to major retailers like Sears and Costco, saw sales dip when Trump took office. Now, Michael Saifer, general manager of Lind Furniture, worries about Canadian chances of winning this round:
"Everyone wants to sell to the Americans - they can buy from whoever they want. I don't know that we're going to win a war with them; we may get killed."
The US tariffs affecting approximately $20bn (£15bn; C$28bn) worth of Canadian exports to the US – about 5% of Canada's annual shipments to its southern neighbour – build upon existing US tariffs on Canadian steel, aluminium, automobiles, and lumber.
Canada's vulnerability lies in the fact that 70% of its exports are destined for the US. Navigating what comes next as both sides stand firm is a delicate balancing act for some businesses.
Image source: Matteo Sgaramella
Image caption: Matteo Sgaramella
Like many retailers, Matteo Sgaramella, founder of Toronto-based menswear brand Outclass, told the BBC that his company places orders with clothing designers months in advance of their arrival in stores. Products ordered by US stores in January will arrive in September but now subject to a new tariff.
"If I contact them now and tell them, hey, you know, you may get an extra 50% bill from UPS on top of what you need to pay me for this shipment, they're all going to say, 'no way, don't ship it,'" Sgaramella said. He is still trying to figure out where the added cost will fall.
"There's going to be a lot of people that go out of business because of this," Sgaramella noted, but he added that only 20% of his wholesale orders are from the US.