Millions of dollars and thousands of jobs are in flow for Canadian companies, since constant changes in tariffs mean that companies based in this country are avoiding financial decisions or feel they cannot do them.
From large multinationals to small attire with less than a dozen employees, the repetitive cry of “uncertainty” is causing more than confusion. It influences financial decisions for large players and freezing smaller companies dry.
For Kun’s shoulder rest, it’s the last. The company is known worldwide for ergonomic violin and viola accessories that makes and exports from Ottawa.
“If you don’t play the violin, you will never have heard of a headrest. If you play the violin, you will know our brand,” said Juliana Farha, one of the company’s directors.
But despite its international profile, the company does not have the resources to simply pivot the new markets when they face tariffs out of the products sold in USA.
“It is our largest market and that represents from 35 to 40 percent of our global market,” said Farha, who explained that the company depends on students, fans and violinists and violists younger to buy their product. A shoulder restraint usually bought once and remains for years, if not decades.
Small businesses cannot easily pivot
Essentially, the company cannot pivot every time the rates policies change to try to replace the potential US clients. There are not exactly millions of additional violinists in the rest of the world, and Kun has already expanded to international markets such as Europe.
“The feeling of recklessness of all this has created tension and uncertainty for us,” according to Farha, who is also concerned that some international competitors will not face the same tariffs as their Canadian company, causing their products to seem even less competitive.
In a scenario like this, business and economic experts say that companies may need to bite the bullet and expect their customers to accept a higher price or lose money themselves.
“Companies have to say: ‘We want to keep our customer base, therefore, we will absorb that additional cost’ or transmit it to their real clients,” said Charmaine Goddeeris, director of Customs and International Trade with the Bdo Canada consulting firm.
Goddeeris points out that many companies may need to determine if they want to continue doing business in the United States.
“If so, then you will have to come to the United States so you can solidify [being] Made in the United States, “he said, since such products would apparently face tariffs when they are sold there.
That is not a decision that a small company can easily take, or at all, without having to relocate completely. Not so much for larger companies, which can have the financial capacity to divide production between countries.
Large companies that stop the investment
But the largest corporations that could allow to spend money also freeze these days.
With the tariff policies that change constantly, in some cases on both sides of the border, many large companies are waiting until the dust sits to invest their cash.
The KP fabric manages and has part of Kruger, the largest hygienic paper manufacturer and tissue in Canada. The company announced in a recent gain call that would delay the construction of a new fabric plant.
It currently operates facilities both in Canada and the United States, and it was not clear in which country the new plant would be.
In a statement sent by email to CBC News, a Kruger representative said that when the company originally announced a new plant in early December, he had believed that he could announce the results of that evaluation in early 2025.
The large and small Canadian companies say that they are trapped in Limbo, since the changing rates threats of the president of the United States, Donald Trump, leave them unable to adapt their business models or know whether to find new markets for their products.
But now, he says things are too questionable.
“Current commercial uncertainty will require that we complete the proper additional diligence before making an official announcement,” wrote François Paroyan, Kuger General Advisor.
In the earning call, the KP Tissue CEO blamed more than Trump’s tariffs for all the uncertainty that is coming, citing Canada’s reciprocal tariffs, a fall in the Canadian dollar and a possible recession as factors in freezing their shares.
The company also did not provide profit estimates for the coming months for the same reasons. He estimated that between $ 600 million and $ 700 million of his income is “exposed” to tariffs in some way.
‘I have to keep your iPhone close’
Algoma steel is in a similar position. The Canadian manufacturer uses thousands that face unpredictable ads on when general rates can be applied or lifted, along with specific steel rates that could directly affect their business.
“You have to keep your iPhone nearby. And, you know, as soon as I leave this interview, I will check the news ticket to see what could have changed,” said Michael García, CEO of Sault Ste. Company based in Marie, Ontario.
During García’s interview with CBC News, the president of the United States, Donald Trump, announced what seemed like a temporary suspension of some rates. At that time, it was not clear if that would apply to steel, or if the specific world tariffs of the steel that Trump had announced in early February would still apply.
It was a perfect example of what is making commercial decisions that potentially are worth hundreds of millions of impossible dollars.
“I don’t know what that delay means, apart from the fact that we could be here in less than a month, going through the same movements. Will there be a rate? Oh, is there a tariff. Now, what are we going to do?” Garcia said.
One thing that can definitely point out is that the company is avoiding spending money where you can.
“We are putting a very high approach to preserve our cash and reduce the greatest possible discretionary expense,” Garcia said.
For now, this uncertainty means less investments, period, of a big business in Canada.
Big or small, companies are fighting: Economist
It is a pattern that the main economist of the Canadian Federation of Independent Business is seeing first -hand in the comments of the members of his organization.
“Because there are so many decisions that are being canceled or changed, companies have difficulty adjusting,” said Simon Gaudreault.
With fear and uncertainty throughout the Canadian economy at this time, business optimism is low, he said.
That translates into frozen hiring and stop the investment, he said, and companies can avoid developing new markets until they know more clearly what will happen.
And that may not be in the letters yet.
“There is a lot, so much fog right now.”
