‘Sense of relief, to a certain extent’ One-month pause leaves threat of tariffs hanging over industry leaders, entrepreneurs By: Gabrielle Piché Posted: 6:27 PM CST Monday, Feb. 3, 2025

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Shipments of goods slowed and Manitoba businesses questioned their futures Monday while bracing for a 25 per cent tariff on Canadian exports to the United States.

It didn’t come. U.S. President Donald Trump backed down from implementing the broad levy by his Tuesday deadline after talking by phone to Prime Minister Justin Trudeau.

Trump promised to pause tariffs on Canadian goods for 30 days.

“There’s going to be a sense of relief, to a certain extent,” said Chuck Davidson, president of the Manitoba Chambers of Commerce. “The concern is, is (this) going to be just another month of stress for business leaders and for consumers?”

The continued uncertainty will likely cause Manitoba businesses to hold off on investments, Davidson noted. He’s hoping future talks with U.S. counterparts — including when Canadian premiers visit Washington, D.C., on Feb. 12 — will dissolve the threatened trade war.

Manitoba trucking companies were feeling the impact of the looming tariffs before the mid-afternoon announcement of a pause. Some exporters had notified truckers they wouldn’t be sending goods south, said Aaron Dolyniuk.

“Usually, the trucking industry is an early indicator of economic activity,” said the executive director of the Manitoba Trucking Association. “When freight slows down, it usually indicates the economy is slowing down.”

Anecdotally, Dolyniuk saw an increase of shipments to the U.S. as tariff worries spiked. Many businesses stockpiled Canadian goods to avoid the 25 per cent tariff.

Nearly $42 billion in goods trades between Manitoba and the U.S. annually. Trump’s steep tariff has “the potential to be both destructive and devastating” to Manitoba’s trucking industry, Dolyniuk stated.

He fears layoffs. Industry leaders and entrepreneurs across the province have echoed his concerns.

A 25 per cent tariff could force Evolution Wheel to move a portion of its manufacturing to the U.S., said owner Derek Hird.

The Winnipeg tire maker ships most of its products to America. The levy would “crush” its business by giving an economic advantage to competitors from China, Sri Lanka and Thailand.

“The Canadian economy isn’t big enough … to support (Evolution Wheel),” Hird said.

Government support would be needed to keep businesses — and jobs — in Canada if tariffs come, he added.

Nearly half of Canadian manufacturers said they’d freeze hiring or lay off workers if tariffs materialized, a recent Canadian Manufacturers & Exporters survey found. Forty-nine per cent expected to shift some production to the U.S.

“As goes manufacturing, so goes the economy,” said Terry Shaw, CME regional vice-president for the Prairies.

Manufacturing accounts for roughly $1 of every $10 in Manitoba’s economy. Layoffs in the sector would affect disposable income, impacting sectors from retail and hospitality to charities, Shaw said.

Meantime, Ray Louie was also bracing for Canada’s response. Trudeau announced Saturday, should Trump enact his levy, Canada would impose 25 per cent tariffs on $155 billion worth of U.S. goods.

Louie manages the Gates on Roblin, a Headingley-based wedding and event venue. It stocks U.S. bourbon, California wine and American produce for the thousands of people it hosts.

“What’s the substitute for Coke and Pepsi?” Louie asked of the U.S. soda brands. “We’re all going to pay 25 per cent more for that.”

The threatened trade war follows years of restaurants dealing with rapid inflation and lost business during the COVID-19 pandemic.

“Everybody else is looking at the same (Canadian) alternatives,” Louie noted, adding the Gates is “large enough in scale that Canadian output often isn’t consistent or enough to meet our demands.”

His comments come as politicians, including Manitoba Premier Wab Kinew, call for Canadians to shop local. Many Manitobans — like cattle farmer Tom Johnson — have plans to increase their spending on Canadian goods if a trade war ensues.

“I’m kind of waiting to see what all (this) entails,” Johnson said when asked if he’s changing his operations due to the tariffs.

Manitoba mining, beef and pork industry leaders highlighted the ongoing uncertainty as a business hindrance. Tariff-induced price inflation could lead to less demand, less production and job losses, Manitoba Pork general manager Cam Dahl said.

He’s seeking a strategic plan for Prairie provinces’ agriculture and food products. It’s time for Prairies representatives to co-ordinate and meet with major state trading partners, Dahl said.

“It’s something that we should’ve been doing a lot more in the past,” he stated. “Relationships aren’t best built during a crisis.”

And supply chains don’t change instantaneously, he and others in the private sector stressed.

Manrex Ltd. is among the companies hoping to grow their Canadian customer base.

The 52-year-old manufacturer builds medication carts, among other products, in Manitoba. However, a majority of sales come outside the province, said John Webster, Manrex vice-president of innovation and product development.

“We’ll certainly be letting all the nursing homes and pharmacy providers know that if they want to buy Canadian, they should be buying from us,” Webster said.

The Manitoba government formed a U.S. trade council last month. Davidson, who sits on the council, previously publicized his intention to focus on what Manitoba can control — including growing its own economy by investing in sectors such as critical minerals and green energy.

gabrielle.piche@winnipegfreepress.com