Businesses brace for tariff impact

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This article was published 12/02/2025 (269 days ago), so information in it may no longer be current.

The last few days have been troublesome for Barry LaRocque and his team down on Brandon’s Park Avenue.

The Atom-Jet Group owner has been running the numbers and developing a plan to address the potential impact of tariffs on steel and aluminum that were announced by U.S. President Donald Trump on Monday.

The tariffs, which are set to come into effect on March 12, will add 25 per cent to the cost of all steel and aluminum imports into the United States.

And for a steel machining company that does a lot of business in the United States, it has fast become a significant issue.

“Obviously it’s going to affect our inputs for raw material, so that’s one effect,” LaRocque said. “And you know, down the line, it depends where you put the increase, and if you don’t take a rate to the end user, then that’s going to affect your margins. If you take it to the end user, then that’s going to affect the selling price, which could affect your sales — not as many people might buy.

“It’s a concern right across the board.”

When reached by the Sun on Tuesday, LaRocque was in the middle of watching an online seminar on the issue of tariffs, as the financial situation they represent is currently top of mind.

Atom-Jet sources some raw materials and other particular items directly from the United States, and in the broader sense LaRocque says the financial impact of the imposition of tariffs on products going into the United States will affect those U.S.-sourced materials, too.

“The tariffs are going to affect a lot more than just the direct product. It’s going to influence what people are selling things for, and what they’re doing.”

Tariffs on crucial products coming from outside of the U.S. places pressure on domestic sourcing of the materials, experts say. The basic rules of supply and demand could drive up costs. This is particularly true in the automotive industry where Canadian steel and aluminum figure prominently.

“Steel producers have to find ways to increase capacity, and aluminum and steel might be in short supply in the short term,” AutoForecast industry analyst Sam Fiorani said in a conversation with The Canadian Press this week. “Producing vehicles has a lot of moving parts, and raising the price of what is among the most important components of the vehicle is only going to raise the prices of an already expensive product.”

In the meantime, the ripple effect of rising prices could impact other manufacturing industries too, including those north of the border. Exactly how remains unclear.

“We do believe there will be an increase in the North American price of steel,” said Sean Lepper, vice-president and general manager of Brandon-based Behlen Industries. “(But) It’s hard to know the impact on a specific type of steel. Most of our steel is plate bar and then linkage coil, so it’s all raw product that we’re buying. And it’s really hard for us to predict the impact of the tariff on those types of steel.”

Lepper said cross-border trade is quite unpredictable at this point. Behlen is Canada’s largest manufacturer of steel building systems and serves customers worldwide, including those in the United States. But most of its raw steel is procured in Canada, so the company’s exposure to the upcoming tariffs “as they currently are being laid out” is limited, Lepper said.

“We do ship some vegetable storages to the U.S., so those are exposed (to the tariffs). But prior to the announcement of tariffs a few weeks ago, we shipped a lot of products out to avoid that. So we’ll do that again this month to do what we can to avoid any issues.

“After that, we will play it by ear, too.”

American customers — at least those who buy with Atom-Jet — are also beginning to realize what these tariffs will mean for their bottom line.

The financial reality of the recent will-he-or-won’t-he tariff threat from Trump over the last several weeks has slowly filtered down to LaRocque’s American customers, particularly since the president’s declaration of a 30-day pause on sweeping tariffs against Canadian imports on Feb. 3.

“Up to a week ago, they weren’t concerned about it in the south,” LaRocque said. “But after the announcement and the discussion — and then the retraction — I think their ears perked up a little more, realizing that ‘hey, this is going to impact us.’”

He says his U.S. customers are now asking questions about cost, saying they don’t want to pay an extra 25 per cent more, and asking how those costs will be passed along.

“Are you going to pay the whole 25 per cent or, you know, what does that look like? Where is there an in-between there? So they have concerns based on the realization that this could impact them,” LaRocque said.

Under the currently announced plan, LaRocque says certain products shipped by Atom-Jet will fall under the raw material tariffs on aluminum and steel, which won’t have as much of an impact. What worries him more is the threat of blanket tariffs next month.

“That’s the one that’s really going to impact us,” he said. “Right now we’re just in the throes of coming up with a plan if and when the full 25 per cent is implemented.”

For his part, Lepper says Behlen and its staff remain very concerned about the imposition of any tariffs on Canadian products — whether they be on steel and aluminum or across the board.

But he noted that there has been a positive to come out of this economic threat against Canada.

“In some ways, its inspiring to see Canadian rally around Canada,” Lepper said. “So maybe there’s a silver lining to all of it.”

» mgoerzen@brandonsun.com, with files from The Canadian Press

» Bluesky: @mattgoerzen.bsky.social