Biz community ‘holding their breath’ on tariffs

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This article was published 21/01/2025 (241 days ago), so information in it may no longer be current.

WINNIPEG — Donald Trump’s U.S. presidential inauguration didn’t come with a side of tariffs — but Manitoba businesses aren’t at ease.

“Everybody’s just sort of holding their breath,” said John Morris, co-director of the Mining Association of Manitoba.

Canadian government officials and industry leaders have spent the weeks preceding Trump’s crowing meeting with American counterparts, stressing the importance of the two countries’ trade relationship and debating retaliation measures if the new president follows through on tariff threats.

Trump first touted a 25 per cent blanket tariff on Canadian imports in November.

He made no direct mention to the Canada-specific hit in his inauguration speech Monday in Washington. He did, however, announce the creation of an external revenue service to collect tariffs, duties and revenues.

“It will be massive amounts of money pouring into our treasury coming from foreign sources,” Trump said.

No immediate 25 per cent tariff is “a little bit of a relief” but nothing to get comfortable about, said Cam Dahl, Manitoba Pork’s general manager.

Local pork producers send upwards of $400 million worth of pork products and $200 million in live pigs to the U.S. annually, Dahl said.

It’s wrapped in the nearly $42 billion worth of goods traded between Manitoba and the U.S. yearly, as per Canadian Chamber of Commerce data.

“This is a trading relationship that is critically important to us,” Dahl stressed.

Manitoba Pork representatives plan to meet with partners in Iowa later this week. Promoting the mutually beneficial bond will be top of the agenda.

The lack of a tariff announcement buys Canada time to underscore its trade importance with the U.S., noted Loren Remillard, president of the Winnipeg Chamber of Commerce.

“(But) even if there isn’t tariffs, the prolonged uncertainty as to whether there will or won’t be can be as damaging in many ways,” he added.

Already, 30 per cent of Canadian manufacturers have delayed investments and 22 per cent have frozen hiring, a recent Canadian Manufacturers & Exporters survey found.

Some companies, including Palliser Furniture, are considering increasing their U.S. manufacturing presence.

“Trump works with uncertainty,” said Carlo Dade, the Canada West Foundation’s director of trade and trade infrastructure. “The Americans have weaponized uncertainty as a vehicle to weaken trade with other countries to drive jobs back to the U.S.”

Dade was in Washington Monday, partaking in inauguration events at the Canadian embassy. Tariffs came up in conversation as a worry point for American automotive, infrastructure and mining industry members, Dade said.

“This is not something that’s unexpected,” Dade said. “(Government) had … months to prepare, and as far as I can tell … nothing was done.”

He referenced an op-ed the Canada West Foundation, a think tank, put out in September. The paper predicted a global tariff on imports to the U.S. following Trump’s campaign trail comments.

Manitoba’s NDP government has taken U.S. relations seriously since its October 2023 election, Premier Wab Kinew said.

Details on a Manitoba trade office in Washington may come in the next couple months.

“Things are looking good. I think we’ve got a great, great candidate, and somebody who would really represent the best of us,” Kinew said. When the office was announced in December, Kinew said he was looking for someone “a little ‘Trumpy’” to lead it.

The premier recently convened with fellow first ministers in Ottawa to discuss the threat of tariffs and visited North Dakota earlier this month to represent Manitoba’s economic interests. Last April, he visited Washington to make inroads with America’s top bureaucrats.

He plans to meet virtually with an American senator Tuesday, he said.

In the meantime, it’s important to increase manufacturing capacity in Manitoba, Kinew said, pointing to government investments in New Flyer and Magellan Aerospace.

It’s a good time to reduce interprovincial trade barriers and diversify export markets, said the Chamber’s Remillard.

Though tariffs may not come, the Canada-United States-Mexico Agreement is slated for reconsideration in 2026 — it’s likely to be a “very challenging (free trade) review and potential renegotiation,” Remillard said.

For now, a “unified voice from Canada” should be top priority, said Elisabeth Saftiuk, the Manitoba Chambers of Commerce’s vice-president of policy and government relations.

“Businesses … are anxious,” she said. “This is just yet another element of uncertainty and anxiety for businesses with the potential to seriously increase costs.”

It follows instability during the COVID-19 pandemic and resulting inflation, Saftiuk said.

Tariffs could mean job cuts, scaled-back investments and higher prices in both Canada and the U.S. Canada has said it’s ready to enact countermeasures if Trump’s tariffs materialize.

Trump has also publicized his intentions to crack down on illegal immigrants in America and increase border security.

Westlink Immigration, a Winnipeg firm, has fielded more queries about moving north to the keystone province in recent weeks. It hasn’t been a drastic increase, noted Pragati Sharma, an immigration consultant with the company.

She’s spoken to longtime U.S. residents who are “looking for options” in Manitoba. However, options are limited, depending on the situation — especially with Canada scaling back its immigration numbers, Sharma said.

Ottawa has announced $1.3 billion for new resources into the country’s border security. It follows Trump’s tariff threats.

» Winnipeg Free Press