American cheese and orange juice will soon be cheaper in St. Albert now that Canada has dropped its tariffs on many U.S. goods. But some local businessowners say their customers plan to keep buying Canadian.
Prime Minister Mark Carney announced Aug. 22 that Canada would drop its 25 per cent countervailing tariff on all U.S. goods that complied with the Canada–U.S.–Mexico Agreement (CUSMA) as of Sept. 1.
Carney’s announcement means a huge swath of American goods (excluding steel, aluminum, and auto) should become cheaper after Sept. 1. Affected goods include oranges, tomatoes, tires, trunks, clothes, drones, playing cards, surfboards, and automatic explosive bird-scaring devices.
Those tariffs raised costs for St. Albert businesses, with Fountain Tire reporting a $40 per tire increase on its American tires, St. Albert and District Chamber of Commerce executive director Shelly Nichol said in an email. The tariffs have also made the future more uncertain, making it a struggle for businesses to plan ahead, invest, and hire.
“Without a clear and co-ordinated response from federal and provincial government, many small businesses in St. Albert remain vulnerable,” Nichol said.
Kris Larsen, vice-president of consumer products for North-Central Co-op, said his stores have dropped some American goods (such as 100 per cent orange juice) entirely because Canada’s tariffs made them too expensive.
“We definitely saw an increase in uptake of Canadian products,” he said, although that has declined since the start of the trade war.
Robyn Noel of Cloud 9 Pyjamas said the tariffs caused interest in her in-store and Canadian brands to spike. She has stopped shipping goods to the U.S. and has stopped attending U.S. vendor shows, seeking out non-American product lines instead.
“I’ve been able to seek out things I didn’t know existed,” she said.
Those tariffs were introduced last March as part of the ongoing trade war with the U.S., which has put steep tariffs on aluminum, steel, copper, automobiles, and other non-CUSMA-compliant goods from Canada due to concerns about fentanyl and border security.
In his announcement, Carney said America’s trade actions in recent months have made it clear that nations must now “buy access to the world’s largest economy” through investments and policy changes. The U.S. has also affirmed that CUSMA-covered goods would not be subject to its new tariffs. That means Canada now has the lowest average tariffs of all of America’s trading partners, with about 85 per cent of Canada–U.S. trade now tariff-free.
“Let’s be clear, Canada currently has the best trade deal with the United States,” Carney said.
Carney said Canada would continue trade talks with the U.S. in the months ahead and would soon launch several nation-building projects to build its economy. Canada’s counter-tariffs on American steel, aluminum, and autos remain in effect.
Lasting change?
Larsen said he was relieved by Carney’s announcement, which should bring customers some much-needed reprieve from inflation. While the tariffs will be gone as of Sept. 1, Larsen said customers might not see immediate results at the till, as it’s up to individual producers to change their prices. Fresh produce could see immediate price cuts, while other items might take longer.
While his company has always supported local producers, Larsen said he suspected many shoppers would go back to buying American goods should they be cheaper once the tariffs go away.
“People are just very price conscious right now,” he said, and buying based on price, not country of origin.
While some shoppers may go back to their old habits, Nichol said this tariff war seems to have reshaped shopping habits in St. Albert. Customers are more appreciative now of Canadian goods, which has contributed to record attendance at the St. Albert Farmers’ Market. St. Albert businesses are also now putting more emphasis on their local roots.
Noel said she wasn’t sure when she’d resume sales to or imports from the U.S., but planned to continue to promote Canadian goods regardless.
“[The tariffs] change almost by the week,” she said, and she wanted to see some stability before she bothered dealing with the U.S.
Updates on the Canada–U.S. trade war can be found at www.cfib-fcei.ca/en/site/us-tariffs#key-dates.
