Canadian-owned brands and retailers expressed disappointment, bewilderment, and anger at the ongoing threat of tariffs from the U.S., which are affecting the economy and consumer behavior despite President Donald Trump’s 30-day pause on the implementation of his new trade policy.
In addition to pausing the 25% tariff on goods from Canada, Trump has repeatedly referred to Canadian Prime Minister Justin Trudeau as the “governor” of the 51st state. Trudeau initially said he believed the tariffs and threat of annexation was a negotiation tactic to force Canada to increase defense spending and security at the border, which Trump has said is allowing fentanyl and illegal immigrants into the U.S.
On Friday, Trudeau told a closed meeting of business leaders at the Canada-U.S. Economic Summit that he now believes Trump is serious about annexing the country for its minerals and other natural resources. On Sunday, Trump said he would impose additional 25% tariffs on all steel and aluminum imports on Monday, among other tariff announcements.
Jen Rainnie, the founder and CEO of British Columbia-based footwear brand Malvados, called the tariff threats disheartening.
“To cause a full-blown trade war that will cripple our countries economy by the U.S., who are our neighbors and allies, is just unbelievable,” Rainnie told SESO. “And the reference to Canada as the 51st State is outrageous. These actions are creating unnecessary disdain and distrust between our two countries.”
Rainnie said she is not reassured by the 30-day window granted by Trump and is concerned that his administration has another agenda beyond issues at the border or national security. Plus, she said damage has already been done – not just to the relationship, but Canadian brands’ abilities to do business with the suspension of Section 321, also known as the de minimis clause, which exempts articles worth $800 or less from import duties or taxes.
“The lifting of Section 321 is already devastating for Canadian e-comm businesses – especially those who source from China, like ours,” Rainnie said. “As of Tuesday, we are now faced with 28% to 40% extra duties on our goods going into the U.S.”
Rainnie believes that de minimis should be suspended for imports from China to prevent Asian fast-fashion brands such as Shein from having an advantage but said the U.S. should make an exception for its neighbor to the north.
Tariff Threat Taking a Toll
If implemented, tariffs, which are a separate issue from the de minimis clause, would not directly impact Canadian businesses such as Malvados because its goods aren’t manufactured in Canada, Rainnie said. But it could force the country into a recession, that that would have a “far-reaching” impact on the business, she said.
Noah Gellis, the president of SGS Sports, agreed. The Montreal, Quebec-based business has been the licensee for Body Glove women’s swimwear since 1984 and owns both the Skye and Eidon swimwear brands,.
“Even though our head office is in Canada, our products are not made in Canada,” Gellis said. “So the tariffs on Canadian-made products don’t affect us directly. That said, they would most likely hurt the economies of both countries – which, in turn, would lead to more widespread struggles.”
For now, Gellis and his SGS team are doing their best to assure customers that the tariffs on Canadian goods won’t affect their prices or deliveries. In the meantime, he said he hopes those in power change directions.
“I’m not sure why the administration thinks Canada is a national security threat,” Gellis said. “Canada has been a constant ally to the USA for over 100 years.”
Buy Canadian
Dylan Lynch, the owner of down jacket, vest, and sleeping bag brand Kluane Mountaineering, said the tariff uncertainty and stress just makes it all harder.
“Running your own business is a very challenging path to choose, and I know that a person in my position has a million things on their minds at all times,” he said. “The threat of tariffs just puts that into hyperdrive, especially if you cater to American customers or have American production partners. It can make things seem hopeless at times, like all the mental bandwidth that you dedicate to your business suddenly becomes worthless because of something out of your control.”
Lynch said the 30-day window is giving organizations some time to divert as much of their supply chain as possible to Canadian partners and customers.
But tariffs would mean Edmonton, Alberta-based Kluane would lose wholesale retail partners, Lynch said. A 25% tariff would eat into the already slim margin that stores have with Kluane’s products, he said, so it would be hard to make a profit without increasing prices, which are already high for Kluane’s products, at retail.
“To make up for this effect, we would have to significantly lower [wholesale] prices, which we can’t afford to do,” Lynch said.
Canadian P.M. Trudeau has encouraged Canadians to buy locally produced products to support the economy north of the border, and some brands are using the opportunity to remind customers that they’re Canadian. Kluane already uses as many Canadian-made materials as it can in its outerwear – not because of tariffs, but because it wants to support local business and production.
“We will be finding Canadian suppliers for the parts that we don’t currently get in Canada, like our thread,” Lynch said. “Unfortunately, Canada does not have a strong reputation in making some of our fabrics, so it’s simply impossible to find something good enough for us in Canada. But these fabrics can be found outside of the USA, and we are actively looking at alternatives.”
Tourism and the Canadian Dollar
While Canadians may turn to Canadian made products, many are choosing to forego their annual trips to Florida or other destinations, not just to protest the changes to trade policy, but because news of tariffs drove the Canadian dollar down to its lowest level since 2003.
Jim Archibald, the owner of Archie’s Surf Shop in Ontario, said the weaker dollar is already impacting how much he can import.
“We buy a lot from our U.S. suppliers, especially at Surf Expo,” Archibald said. “And we have been building these relationships for decades. So how this will all play out is a bit unsettling. We have a lot of orders being held back as we wait this out.”
Archie’s may have to reduce its seasonal staff and will lean into its Canadian suppliers, which have better offerings now than they used to, he said.
“If anything, this has opened our eyes to keeping some more of our buys local where we can,” Archibald said. “We also have built a nice relationship with our local printer and that business has been climbing every year. Now we are starting earlier with them to build up our inventories, so we don’t get caught short.”
And Archibald’s U.S. suppliers have been helpful, too, in some cases offering discounts to help the retailer get through these uncertain times. Another is licensing and printing its designs in Canada using direct-to-garment printing.
“We get along with our U.S. neighbors and suppliers very well,” Archibald said. “We see them as friends. We own a home down here in Deerfield Beach, Florida, and when I look around, I only see people – not Americans and Canadians. Emotion does come into play when we feel bullied.”
Erik Anderson, the owner of British Columbia-based wakesurf board brand Kanuk Board Co., said just 17% of sales come from the U.S., 25% are Canadian customers, and the rest are international buyers.
His brand will target Canadians with digital ads reminding them that they’re a Canadian company worthy of support. And while he said he feels angry about the threat of tariffs, Kanuk’s relationship with its American customers is great. And those customers are hardly asking for prices to increase on goods imported from Canada, Mexico, and China – which is likely to happen if the tariffs go through.
“I think that the news media and the Americans are finding out that Canadians are polite and all, but we also have that hockey mentality,” Anderson said. “If you pick a fight with us, we’re going to fight back.”
Kate Robertson can be reached at kate@shop-eat-surf-outdoor.com.
