Trump’s trade war has ‘woken up’ many. Will consumers still ‘Buy Canadian’?

With U.S. President Donald Trump increasing tariffs on Canada to 35 per cent, some areas of the economy coulcad see higher costs as early as this week.

However, with poll data repeatedly showing Canadian consumers have been using their loonies to ‘Buy Canadian’ amid the trade war, how much could these latest tariff hikes discourage shoppers?

“This trade war has woken up Canada. We’ve been a little bit complacent, and we’ve become a lot more Canadian-focused, and I think our Canadian companies are going to benefit from that,” says Canadian retail analyst Bruce Winder.

“The question is: how long will this roll? Will things go back to normal if and when the trade war finishes?”

The new tariff hike means that all Canadian goods imported into the U.S. that don’t comply with the terms of the current Canada-United States-Mexico Agreement free trade agreement (CUSMA) will now have an additional import duty of 35 per cent — 10 per cent higher than before.

Business leaders and industry experts highlight that although most products will be tariff-free under the current trade agreements, they may still feel an indirect impact.

“While it is good news that most Canadian exports will remain tariff-free due to the CUSMA/USMCA exemption, the uncertainty alone will continue to take a toll on Canada’s small businesses,” said Dan Kelly, president of the Canadian Federation of Independent Business (CFIB).

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“CFIB supports the view that no deal is better than a bad deal, but the lack of resolution means small firms will not be able to plan for the future or continue to put off difficult choices. Many businesses have been holding off (on) layoffs or downsizing, hoping for a deal to be reached. Without immediate support, many small businesses will be forced to scale back operations.”

If industries and businesses alike are faced with higher costs, they may be forced to eventually increase prices for customers and clients to maintain profits.

In many cases, businesses are absorbing these higher costs to keep prices relatively stable and hopefully maintain customer loyalty, recent data from Statistics Canada found.

This could mean businesses are sacrificing profits, so it may not be a sustainable long-term strategy. The concern is that it could lead to cost-cutting by way of layoffs or putting off expansion plans.

Many consumers have been vocal about wanting to support local businesses by actively choosing Canadian-sourced and manufactured products and services, even if that means sometimes paying higher prices, recent polling by Ipsos exclusively for Global News found.

The Ipsos poll released ahead of Canada Day, found around three-quarters of Canadians surveyed say they intend to avoid travel to the U.S. — up 10 points since February — while the number of people avoiding U.S.-made goods has risen five points to 72 per cent.

When asked if they think less of the U.S. as a country because of Trump’s various attacks on Canada’s economy and sovereignty, 77 per cent of those polled said they agreed, with nearly half of those respondents saying they strongly agreed. That number was also up by nine points.

The ‘Buy Canadian’ movement has already caused business owners in Canada to pivot by choosing alternative imports to the U.S. when stocking their shelves and warehouses.

“It isn’t just buying Canadian-made goods, it’s buying Canadian products at Canadian retailers. If you want to support your country at this moment, please visit your local independent businesses,” says Kelly.

“You at least do the country a benefit when you are purchasing in small local companies as opposed to the big U.S.-based chain stores. The best way to do that is to buy those Canadian-made goods at small, local, independently owned, operated businesses that are right across the country.“

The ‘Buy Canadian’ movement has extended beyond goods and into travel, with Canadians seeking alternative destinations to the U.S. and increasingly opting for domestic and overseas options.

The question now is — will it last?

“With a new wave of tariffs against Canadians, that sort of rekindles that ‘Buy Canadian’ sentiment. Having said that, at the end of the day they’ve got to make ends meet. So they may have to buy products that aren’t made in Canada just to keep their pocketbook balanced,” says Winder.

“It’s going to vary a bit by customer segment.”

Are you doubling down on efforts to ‘Buy Canadian’ amid the increased tariffs? We want to hear from you. Email us at shareyourstory@globalnews.ca and we may be in touch for future articles