U.S. tariffs potentially devastating for Canadian businesses: CME poll

Trump arrives on the floor of the New York Stock Exchange after ringing the opening bell, Thursday, Dec. 12, 2024, in New York. (THE CANADIAN PRESS/AP/Alex Brandon)

OTTAWA — The tariffs threatened by U.S. president-elect Donald Trump could be potentially devastating for Canadian businesses and workers, said a new survey by lobby group Canadian Manufacturers and Exporters.

The report released Thursday found nearly nine in 10 of the more than 300 Canadian manufacturers surveyed would face significant or very severe impacts if the U.S. imposes tariffs on Canadian imports.

"These findings show why we need an urgent and co-ordinated response from governments to protect manufacturing businesses, workers and families," said Dennis Darby, chief executive of CME, in a statement.

"Failure to do so will be devastating to our economy."

Trump has threatened to impose a 25 per cent tariff on all imports from Canada and Mexico once he takes power next month if the countries do not stop the flow of migrants and illegal drugs into the U.S.

Darby said the move will endanger nearly $600 billion in exports, two-thirds of which are manufactured goods.

The federal government on Monday announced $1.3 billion in spending on border security and the immigration system as part of its fall economic statement in an effort to placate Trump's concerns.

Trump however raised further concerns with Canadian trade on Wednesday, claiming in a post on Truth Social that his country is financially supporting its northern neighbour.

The U.S. president-elect wrote that "we subsidize Canada to the tune of $100,000,000 a year" -- an apparent reference to a previous claim about a $100-billion trade gap -- and said the imbalance "makes no sense."

The talk of trade disruptions has many manufacturers in Canada already taking pre-emptive measures to mitigate tariff risks ahead of the inauguration.

The CME poll of 330 manufacturers found 30 per cent are accelerating shipments to the U.S., while another 30 per cent say they have postponed planned investments.

The non-random survey conducted between Dec. 11 and 18 also found 22 per cent have already implemented hiring freezes.

The report also says 48 per cent of manufacturers will consider a hiring freeze or layoffs if the tariffs are implemented, 46 per cent will consider postponing or cancelling planned capital investments and 49 per cent will consider shifting some production to the U.S.

Of the companies surveyed, about 40 per cent had fewer than 100 employees, another 40 per cent had between 100 and 499 and the remaining had more than 500 staff.

This report by The Canadian Press was first published Dec. 19, 2024.