Canadian small businesses working to fend off effects of tariffs, despite reprieve

U.S. President Donald Trump may have delayed a 25 per cent tariff on Canadian goods for a month, but Tyler Pubben isn’t letting his guard down.’

The president of Tapmaster — a Calgary business making faucets with brass and polymer from the U.S. — is looking to reduce the company’s reliance on the U.S. by beefing up sales at home, expanding into new markets and seeking alternate suppliers.

“It’s been easier to sell to the U.S. just because the U.S. customer base is larger,” he said Tuesday. “But the political environment is just not as trustworthy as it was even two weeks ago, so we’re actively looking for ways to diversify.”

Pubben’s attitude is much the same across Canada’s small business community, which is refusing to treat Trump’s 28-day reprieve as a sure thing because it’s seen how unpredictable and brash the president can be.

To avoid being hurt, should Trump make good on his promise for higher duties, small businesses are analyzing their supply chains, partners, margins and expenses.

Many are even going so far as to look both closer to home and farther afield for manufacturers, suppliers and buyers.

“But it’s not going to be easy and it’s not going to be (within) 30 days,” Pubben said.

Tapmaster needs the brass in its faucets to have no or low quantities of lead because many of its customers are hospitals, dental offices and consumers.

However, “zero-lead brass is actually remarkably hard to find,” Pubben said.

“There’s only a couple of companies that make it,” he said, rattling off a list of suppliers that are predominantly in the U.S., Germany and China.

Shelby Taylor faces a similar situation. Her business, Chickapea, is based in Collingwood, Ont., but makes its pulse-based pastas in the U.S.

“With our pasta being both high protein and gluten-free, it takes really specialized equipment and expertise to produce — and the people who have really developed expertise in making this type of pasta are just not located here at the moment,” she said.

Because Chickapea ships its products to Canada from the U.S., it would be subject to Canada’s retaliatory tariffs, so the company is working with its manufacturer as it considers other solutions.

Canada’s $30-billion retaliation package meant to exact revenge has been put on hold to match Trump’s pause but would apply 25 per cent tariffs on a wide swath of goods entering the country from the U.S., including uncooked pasta.

If it’s enacted, Taylor said Chickapea “wouldn’t have a choice but to pass on some of the cost to the consumer.”

“That’s absolutely not what we want to be doing as we are already somewhat of a premium product in the natural food space, but there’s no way that we could avoid it and have a business that was sustainable,” she said. “The margins are not there for that.”

Karen Danudjaja, the owner of Vancouver-based beverage powder brand Blume, has been mulling some of the same scenarios but isn’t keen on passing along costs to customers.

Instead, she’s treating the respite as one month for Blume to be more thoughtful about its supply chain and consider how to decrease its U.S. reliance.

“It’s a time for us as Canadian business owners to take another look at that to see if there are other opportunities we should be exploring in the near term,” she said.

Blume sources ingredients like turmeric and cinnamon from countries such as Sri Lanka, India and the U.S., but it produces and packages its hydration powders just outside of Vancouver.

The tariff feud arrived as the company was about to launch its products in Whole Foods grocery stores in the U.S., so Danudjaja said it’s been trying to build up inventory in warehouses south of the border to delay any impacts of potential higher levies.

Even if she can get product across the border without facing the higher tariffs, Danudjaja frets about how American shoppers will react to her brand.  “Will U.S. customers rally around a Canadian product right now?” she questioned.

Rather than get lost in fears, Danudjaja was resolving herself to trying to be positive about the situation.

“It would be easy for me to get stuck there, but ultimately, there’s always going to be something on the horizon,” she said. “We just have to take control of what we can, make the best plans we can with the information we have and move forward from there.”

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