CTV’s Chief Financial Correspondent Amanda Lang weighs in on whether Canada should respond to new U.S. tariff threats and how both economies are affected. <\/p>\n
The owner of an Ontario-based cosmetic company says U.S. President Donald Trump\u2019s newest tariff threat is causing a new round of \u201cfear\u201d and \u201cconfusion\u201d for small businesses across Canada who are already dealing with significant economic headwinds. <\/p>\n
Trump announced earlier this week that come Aug. 19, the U.S. will charge a 50 per cent tariff on a wide range of Canadian goods, including some that are covered under the countries\u2019 free trade agreement.<\/p>\n
Officials in the U.S. have cited unfair trade practices, including provincial bans on U.S. booze, as justification for the move.<\/p>\n
\u201cThis number (50 per cent) is obviously far more concerning than what we heard in the past,\u201d said Jenn Harper, the founder and CEO of Cheekbone Beauty, which is headquartered in St. Catharines, Ont. and is one of the first Canadian Indigenous-owned and founded cosmetics companies. <\/p>\n
Cheekbone Beauty supplies products to Sephora in Canada and JCPenney in the United States. Harper noted that the U.S. market represents about 20 per cent of the business, which has four full-time employees.<\/p>\n
\u201cAs we saw last year, there were so many moving parts during this time that it was truly hard for an operator to actually make a decision because things were just constantly moving and changing,\u201d she told CP24.com in an interview this week.<\/p>\n
\u201cWhen you felt like you had your footing, of course, something else would happen.\u201d<\/p>\n
She noted that in an effort to address a desire from customers to have more products made here in Canada, last year the company shifted some of its manufacturing from Italy to a local manufacturer. <\/p>\n
\u201cBringing them here to make them in Canada so that our Canadian consumer would be happy and now (we) understand that it will be not great for our U.S.-based customers because of this,\u201d she said.<\/p>\n
She said the company has absorbed the cost of tariffs for U.S. customers in the past.<\/p>\n
\u201cObviously that cuts into our margin… but we have customers that we\u2019re trying to service all across North America and we didn\u2019t want this to impact them,\u201d she said. <\/p>\n
\u2018Deeply, deeply troubling\u2019<\/p>\n
Dan Kelly, the president and CEO of the Canadian Federation of Independent Business (CFIB), said if this tariff materializes, it could prove fatal for some companies. <\/p>\n
\u201cIt\u2019s fairly broad (and) would affect a whole bunch of businesses, in particular, a whole bunch of small and medium sized companies\u2026. They have fewer options in terms of just shifting trade from one person or one place to the next,\u201d Kelly told CP24.com. <\/p>\n
\u201cFor some businesses, you know a 50 per cent tariff on their goods on exports to the United States would essentially make their business defunct. They would not make sales to the U.S. and if that\u2019s a critical market for you, it could be deeply, deeply troubling.\u201d <\/p>\n