Background on U.S.-Canada Trade Relations

The relationship between the United States and Canada has long been essential for both countries’ economies. In 2024, trade in goods topped $762.1 billion, with Canadian exports overwhelmingly directed towards U.S. markets. Data from the Office of the United States Trade Representative highlights that over 75% of Canada’s exports are sent to the U.S., while nearly 50% of goods imported by Canada originate from its southern neighbor.

Impact of Tariffs on Canadian Businesses

In March 2025, the Trump administration unveiled significant tariffs, including a 10% levy on Canadian energy and 25% on several other imports from Canada and Mexico. This move has raised concerns among Canadian business owners who are feeling the strain of increased costs and trust erosion in their trading relationship with the U.S.

Automotive tariffs set to impact vehicles and auto parts sourced from Canada further complicate the situation. These tariffs are part of a broader strategy announced on Inauguration Day, reflecting Trump’s promise to realign trade dynamics and attitudes.

Responses from Canadian Businesses

In light of these developments, many Canadian businesses are adapting their strategies. For instance, Balzac’s Coffee Roasters has creatively renamed its “Americano” to “Canadiano,” promoting national pride through branding. Similarly, Your Independent Grocers identifies products prepared in Canada with a special badge, emphasizing local sourcing.

Changes in Consumer Preferences

According to the Canadian Federation of Independent Business (CFIB), nearly 50% of members engage in cross-border trade. A survey indicated that over a quarter of CFIB members noticed a growing preference for Canadian-made products, while more than half expressed doubts about the reliability of the U.S. as a trading partner. This shift reflects the emotional impact of tariffs, described by Executive Vice President Corinne Pohlmann as a feeling of betrayal among Canadians.

Specific Instances of Trade Reactions

A notable instance of this sentiment is the Liquor Control Board of Ontario (LCBO), which ceased purchases of U.S. products effective March 4, 2025. Signs in stores explain the absence of American items like California wines and Vodka brands from Texas, encouraging support for local products instead.

Long-Term Consequences for Trade Relations

While some businesses may eventually repair trade partnerships, existing tariffs have already strained relations between U.S. and Canadian companies. Pohlmann articulates concerns that even if tariffs are lifted in the future, the trust required to maintain solid business relationships may have been irreparably damaged. She points out, “While we’d welcome a permanent reprieve from tariffs, the trading relationship between Canada and the United States has been fractured and may never be the same again.”