A recent escalation in trade tensions between the United States and Canada is exerting increasing pressure on small businesses across the border, with owners reporting higher costs and declining demand as a result of newly imposed tariffs.
The dispute began last month when the U.S. government introduced tariffs on Canadian imports valued at around $20 billion (CA$27.6 billion). Canada retaliated by imposing equivalent duties on American goods. Subsequently, the U.S. announced additional import bans affecting Canadian products such as wine, whiskey, select motorcycles, and the dairy ingredient whey. Collectively, these measures pertain to roughly 5.5% of the two countries’ bilateral goods trade; however, the repercussions on smaller enterprises appear disproportionate given their limited financial buffers.
Business owners on both sides describe a combination of cost increases, disrupted orders, and deteriorating customer relationships as they navigate the evolving tariff landscape amid already rising shipping expenses linked to heightened energy prices amid ongoing conflicts in the Middle East.
In Vermont, Mateo Kehler, co-founder of Jasper Hill Farm, a specialty cheesemaker in Greensboro, noted a swift impact following the U.S. tariff announcement. Although cheese was not targeted by new duties, Canadian wholesale customers canceled holiday orders, a development Kehler attributes less to direct tariffs and more to growing consumer resentment toward U.S. political leadership. “The backlash on the market side is actually what’s affecting us the most,” he said, highlighting that adverse rhetoric may be spurring boycotts.
On Vancouver Island, Revival Stillworks, which designs and manufactures equipment for craft distilleries, is facing a 50% tariff on products shipped to the U.S., including costly stills and fermenters typically valued between $250,000 and $2 million. Co-founder Darcy Lane indicated that the tariff has led to project cancellations and reduced demand from American clients, who comprise roughly half of the company’s customer base. Rising oil prices are also contributing to higher transportation costs, prompting the business to consider diversifying into servicing the local maritime industry if trade restrictions persist.
Similarly, Cassandra Sotos, CEO of AmpRx in Nashville, Tennessee, reported a downturn in demand among Canadian customers for her guitar amplifier power adapters, despite the product not being directly affected by tariffs. Sotos suggested that uncertainty around potential import fees and unfavorable perceptions of the U.S. may be contributing factors. She underscored that any decline in sales is significant for a small enterprise, especially amid shipping costs that have surged two to three times higher in response to Middle Eastern conflicts.
Meanwhile, Canadian beekeeper Peter Awram, CEO of Worker Bee Honey Co. in Rosedale, British Columbia, is confronting a tariff-based squeeze on an already fragile industry. The U.S. recently imposed a 50% tariff on Canadian honey, a key export, while Canada reciprocated with tariffs on American honey—a move Awram characterizes as ineffective due to widespread imports of adulterated honey from countries like India and China entering the U.S. with American documentation. With roughly 60% of Canadian honey exports destined for the U.S., Awram fears that sustained tariffs may push many commercial beekeepers out of business, noting the potential for an oversupplied domestic market in Canada leading to further price erosion.
Analysts suggest the broader economic effects of the trade dispute may be limited given the proportion of goods involved, but for many small business owners, the combination of tariffs, retaliatory measures, and elevated shipping costs is creating a challenging environment with uncertain prospects for near-term relief.