Tariff Troubles: How trade uncertainty is hitting immigrant businesses

Credit to Author: Baisakhi Roy| Date: Fri, 21 Feb 2025 22:32:43 +0000

The ongoing uncertainty around the U.S.-Canada tariff situation is creating significant challenges for small- and medium-sized enterprises (SMEs) across Canada. Nearly one in five (18%) SMEs are experiencing cancelled or paused orders due to the looming tariff threat, with this figure rising to 34% among exporters, according to new data from the Canadian Federation of Independent Business (CFIB).

Abhishek Mediratta

“The uncertainty around tariffs is almost as damaging as tariffs themselves. It reverberates among business owners right now, and businesses are adjusting operations on the fly as a result,” said Simon Gaudreault, CFIB’s chief economist and vice-president of research. “While we may have a few weeks of reprieve, there is still concern about the long-term impact of tariffs on small businesses.”

The financial squeeze on SMEs

According to numbers released by CFIB, a majority (54 per cent) of SMEs say they don’t feel prepared for the impacts of U.S.-Canada tariffs. In response, businesses are adopting various strategies: 24 per cent are delaying expansion plans, 20 per cent are considering workforce reductions, and 45 per cent are searching for new suppliers. Additionally, 62 per cent of SMEs indicate they may pass on increased costs to customers if tariffs are imposed.

Indian-born Abhishek Mediratta, founder and managing partner of Fresh Burrito, a restaurant chain with 36 locations across Canada, is feeling the impact firsthand. “As a restaurant business in Canada, all our supply chains have been disrupted, and the costs of almost everything can go up by as much as 40 per cent,” he explained. “Since a majority of our produce comes from the U.S. and Mexico, we’re looking at a potential hike of 50 per cent. Prices of necessary raw materials like chicken are going up by 15 per cent, and something as basic as aluminum foil has increased by 25-40 per cent.”

Immigrant-owned businesses face unique challenges

Newcomer-owned businesses are especially vulnerable due to tighter margins and reduced flexibility, making it harder for them to scale. Jasroop Gosal, interim spokesperson and policy and research manager at the Surrey Board of Trade, in B.C, noted, “Immigrant-owned businesses tend to be more vulnerable due to their smaller size, limited financial reserves, and heavy reliance on imported products.”

The board is actively advocating for tariff relief, financial assistance, and policy measures to mitigate the burden on small businesses. “Local governments can provide grants, tax relief, and procurement opportunities while also lobbying higher levels of government to address trade concerns,” said Gosal. In addition, the Board is organizing forums and workshops to educate business owners on risk mitigation strategies, alternative supply chains, and financial planning to navigate these challenges.

Nida Ateeq

Nida Ateeq, a recent immigrant from India and owner of a marketing agency that helps businesses grow with data-driven strategies and effective campaigns, is facing indirect challenges. “My potential U.S. clients are reconsidering marketing budgets due to higher operational costs. Where it used to take a week to close a deal, now it’s taking over a month,” she shared.

To adapt, Ateeq is shifting her focus towards Canadian clients, aiming for a 90 per cent local client base. “I’m offering discounts, bonuses, and free tools to retain my U.S. clients, but I still expect a 20-30 per cent decrease in revenue,” she added.

Policy and support measures needed

A strong majority of small firms (81 per cent ) are calling for Parliament to be recalled to address the tariff threat. CFIB is advocating for measures to help SMEs navigate this period of instability, including halting the April 1 carbon tax increase and passing legislation to support small businesses.

“The message from small business owners is clear: U.S. tariffs and Canada’s retaliatory measures will add further financial strain on businesses and Canadians alike,” Gaudreault said. “If Canada retaliates, any revenue from tariffs must be returned to importers and exporters quickly to minimize the impact.”

As the tariff situation continues to unfold, SMEs across Canada are bracing for more challenges. 

Expert tips and resources

Immigrant-owned businesses are facing increasing challenges as global trade uncertainties and rising costs impact operations. Florence Kao, program manager for the Self Employment & Entrepreneur program at DIVERSEcity, offers valuable insights on how these businesses can adapt and thrive during uncertain times. DIVERSEcity provides mentorship, business planning, and networking events to help entrepreneurs stay resilient.

The post Tariff Troubles: How trade uncertainty is hitting immigrant businesses first appeared on Canadian Immigrant.
http://canadianimmigrant.ca/feed