Canadian businesses are commencing operations on Tuesday amidst the initiation of new dollar-for-dollar tariffs by the federal government on $28 billion worth of U.S. imports. While many business owners are preparing for increased costs and supply-chain challenges, experts suggest that consumers may not experience significant impacts.

The tariffs came into effect at 12:01 a.m. Tuesday, affecting nearly 700 American products with rates ranging from 15% to 50%. Targeted items include commodities like steel and aluminum, household goods such as toilet paper, and specialized products like coin-operated arcade games.

These new tariffs are a response to the 50% levies imposed by the U.S. on various products worth over $28 billion on August 22. Dan Kelly, president of the Canadian Federation of Independent Business (CFIB), representing more than 100,000 small and medium-sized firms nationwide, expressed concerns that some members feel marginalized in the ongoing trade dispute with the U.S.

JS Furniture, a Manitoba-based retailer of home furnishings and appliances with multiple locations, estimates that American goods constitute 60% of its sales volume. The company anticipates that laminate-style bedroom suites will be significantly impacted, with larger items facing a 50% tariff and smaller items subject to a 25% tariff.

General manager Brian Kyca highlighted the challenges of assessing the impact, citing limited information from agencies like the Canada Border Services Agency. Despite the uncertainties, JS Furniture plans to absorb the increased costs while negotiating with U.S. manufacturers for better deals.

Colin Mang, an economics professor at McMaster University, noted that businesses nationwide are navigating a delicate balance in responding to the tariffs, with retailers historically absorbing a significant portion of the costs. The extent to which retailers pass on these costs to consumers will depend on the expected duration of the tariffs, potentially affecting profitability.

Bank of Canada Governor Tiff Macklem emphasized that the tariffs will impact specific businesses but have limited reach due to their narrow focus. The trade war has prompted JS Furniture to pause expansion plans, with employees feeling the effects, particularly sales staff reliant on consumer spending.

Mang explained that the new tariffs primarily target U.S. goods with domestic alternatives, aiming to bolster Canadian companies’ market share domestically. While businesses may face challenges, consumers are unlikely to notice significant changes in their daily lives due to the tariffs.