Waning trust

When Kathy Tran-Riese’s eyeglass company was faced with a tough decision in the face of a trade war last May — eat the huge tariff cost, or pause shipments to the U.S. — she chose the latter, losing nearly half of her customer base in the process.

Nearly a year later, she’s found a way to make it work. KayTran Eyewear opened a distribution centre in Ohio in September to receive the frames, which are made for people with low nose bridges and exported from China, directly into the U.S. But now, she’s navigating a new hurdle: trying to repair her business’s relationship with its American customers.

“From my perspective, I almost foolishly thought that as soon as it opened up, it would be opening up the floodgates in a way, customers that had been waiting to come back and waiting to return with us,” she said Wednesday.

“But once you lose that customer base for several months, a lot of them have gone elsewhere, a lot of them have lost touch with you.”

She’s giving this distribution model a year to see how it plays out, and is focusing on communicating directly with customers about how ever-changing tariff talks could impact the business, but there’s a lingering uncertainty that has impacted consumers.

“Maybe there’s a little bit of sentiment there around us turning them off initially,” she said. “I think there’s a lot of heightened emotions and things like that that probably played into some of those factors.”

Manitoba small businesses are losing their faith in the U.S. as a trade partner at a growing rate, and finding their bridges with U.S. partners burned, according to a nation-wide survey published Wednesday.

Nearly half of the 80 Manitoba small businesses polled by the Canadian Federation of Independent Businesses said they no longer considered the U.S. a reliable trading partner and 70 per cent said the ongoing trade war had negatively impacted their relationship with U.S. trading partners or clients.

Those numbers are mostly in line with Canada-wide polling published by the CFIB, which found 75 per cent of businesses had strained relationships with U.S. partners, up from 49 per cent in March of last year.

“Ultimately, it has incurred very large costs on our members and on Manitoba small businesses,” said Tyler Slobogian, a senior policy analyst with the CFIB.

“Not only have they had to be resilient through all this uncertainty, but they’ve had to diversify their markets, and lose out, essentially on many clients and customers across the border.”

“Ultimately, it has incurred very large costs on our members and on Manitoba small businesses.”

Meanwhile, the federal regional tariff response initiative, meant to support small and medium-sized businesses, has proven restrictive to many small businesses, leading to just one per cent of businesses eligible in Canada applying for the program, according to the CFIB.

“Provincially, as well, I think this (upcoming March 24) budget is going to be key for Manitoba businesses,” Slobogian said.

We need to encourage investment. And I think, talking to business owners over the last few weeks, as we lead up to the budget, that many of them have singled out that Manitoba has a very high-tax environment, makes it less competitive, less attractive to invest here.”

Lloyd Atchinson, an agriculture leader in rural Manitoba who has owned Poplarview Stock Farm in the R.M. of Sifton since 1970, was one of the voters in the CFIB’s poll who said his faith in the U.S. as a trade partner is waning.

“It’s probably too early to say, but I’m assuming it’s going to be changed forever,” he said.

Livestock operations are included under the Canada-United States-Mexico agreement, which protects it from tariffs for now. While Poplarview is not currently exporting to the United States, but they have in the past, and, unlike farming grain, livestock can’t be stored away for a day when the market is right, Atchinson said, leaving farmers to wait and wonder about the future.

“It’s a North American market, so whatever (U.S. President Donald Trump) decides to do on some morning could affect the price drastically … we’re waiting for the other shoe to drop.”

malak.abas@freepress.mb.ca