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'Half my business will be gone' - firms in Canada and US fear trade war

August 24, 2026

Small business owners in Canada and the US are facing severe economic consequences after trade negotiations collapsed over the weekend, resulting in both countries imposing 50% tariffs on each other's goods. Canadian businesses that depend heavily on American customers, like Calgary jeweler Cindy Baldassi who derives 75% of her revenue from US sales, expect to lose roughly half their business due to the price increases needed to offset tariff costs. The tariffs, which took effect on Saturday for US imports and will begin September 8 for Canadian countermeasures, apply to diverse products ranging from furniture and clothing to dairy and electronics.

Who is affected

  • Cindy Baldassi, owner of CindyLouWho2 jewelry company in Calgary, Alberta
  • Canadian jewelry business customers in the United States
  • Michael Saifer, general manager of Lind Furniture in Ontario, Canada
  • Matteo Sgaramella, founder of Outclass menswear brand in Toronto
  • US clothing stores that order from Outclass
  • Mike Roach and Kim Osgood, owners of Paloma Clothing in Portland, Oregon
  • Montreal-based company that produces pillows for Paloma Clothing
  • Canadian exporters (approximately $20 billion worth of goods affected)
  • Small businesses on both sides of the border
  • Large store clients like Costco
  • Clothing designers and wholesale customers

What action is being taken

  • US President Donald Trump has imposed 50% tariffs on Canadian products including wine, dairy, cement, clothing, and hockey equipment (effective Saturday)
  • Canadian Prime Minister Mark Carney is imposing tariffs on US steel, dairy, appliances, and electronics starting September 8
  • Cindy Baldassi is adding 50% to the price of most of her products
  • Matteo Sgaramella is determining where to allocate the additional tariff costs
  • Mike Roach and Kim Osgood are holding their original pillow prices and hoping the situation gets resolved

Why it matters

  • This trade war significantly threatens small businesses that lack the resources and flexibility of larger corporations to absorb or navigate sudden cost increases. Canada is particularly vulnerable because 70% of its exports go to the United States, meaning escalating tariffs could devastate the Canadian economy. The overnight implementation without advance notice has left business owners unable to plan alternatives or renegotiate with vendors, forcing them to choose between raising prices (risking lost sales) or absorbing costs (risking business viability). The situation demonstrates how quickly international trade disputes can create cascading economic consequences for small retailers and manufacturers who depend on cross-border commerce.

What's next

  • Canadian government will release details of countermeasures in the coming days
  • Tariffs on US products from Canada will take effect on September 8
  • Matteo Sgaramella's products ordered in January will arrive in September with new tariffs applied
  • Paloma Clothing owners plan to hold original prices and wait to see if the tariff situation gets resolved

Read full article from source: BBC