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What Do New US-Canada Tariffs Mean For Retailers & Consumers as Trade Talks Collapse?

Written by Nicholas Morine

With the recent collapse of trade talks between the U.S. and Canada, both President Donald Trump and Prime Minister Mark Carney seemingly at odds following the failure of recent negotiations, tariffs hikes on both sides of the border have been announced.

The United States has planned $20 billion in new tariffs to be added to those existing, targeting products including vehicles and automotive parts — and Canada has laid out its dollar-for-dollar $20 billion tariff strategy targeting the U.S. targeting dairy, seafood, steel, and farm equipment, among other items, per Forbes. And while the tariffs enacted by President Trump went into effect August 22, the retaliatory tariffs promised by Prime Minister Carney come into effect on September 8.

As Forbes senior contributor Sharon Edelson highlighted, U.S. retailers and consumers are bracing for the impact generated by additional tariffs.

“For U.S. shoppers, the fallout will be seen at the checkout as retailers decide how much of the added costs they can absorb before passing them on to consumers,” Edelson wrote.

“This comes at a particularly sensitive time for shoppers, who have prioritized saving money. As more customers gravitate to Walmart and Target, it’s not just the value-oriented who are concerned about price, but even those earning $100,000-plus annually,” she added.

While the overall sums involved may appear relatively modest, the greater issue of ongoing — or even increasingly — volatility brought on by a variety of factors, including trade and tariff policies, seems to be of the most concern to analysts. John Mercer, head of global research and managing director of retail research at Coresight, spoke to the notion that consumers had become much warier, holding their wallets tighter as price increases and general inflation continue to exert pressure. Couple that with retailer anxieties over the same 15 to 18 months of “unpredictability and volatility,” and uncertainty seems to be the term to describe the near future for both businesses and shoppers.

Others cited by Edelson — Marcus Shen, CEO of B-Stock; and Jonathan Gold, VP for supply chain and customs policy for the National Retail Federation — remain bullish about retailers’ prospects around inventory management.

“Years of trade issues have made retailers more resilient, Shen said, noting that it’s nonetheless created ups and downs from both the supply and demand perspectives,” Edelson wrote, also noting that, per Shen, the added cost of tariffs would have to be eaten by one party down the line — whether the manufacturer, distributor, or consumer.

“One round of tariffs has been replaced with another, but retailers will be well-stocked for the coming holiday season. Retailers know how to adapt to shifting situations and are well prepared to meet consumers’ demand for affordability and choice,” Gold said, reinforcing the notion that retailers weren’t exactly new to this paradigm.

Canadian Consumers See Second Resurgence of ‘Buy Canadian’ Sentiment Following New Tariffs

On the Canadian side of the equation, shoppers are redoubling previous efforts to purchase Canadian-made products, with retailers and manufacturers increasingly taking great pains to label said items whenever possible. Major grocer Loblaws has once more added “T” logos to items impacted by tariffs, while continuing to feature maple leaf iconography to signify Canadian products on store shelves.

“Margaret Chapman with Narrative Research says the buy Canadian movement is becoming entrenched in shopping habits as trade tensions worsen and consumers look for ways to support the local economy,” The Canadian Press reported, via CTV News.

“She says polling has shown many shoppers are willing to pay more for Canadian products, a trend that is likely to gain momentum as the trade war intensifies,” the report added.

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