Escalating trade tensions with the U.S. have landed a significant blow to the London region’s economy, with new, steep tariffs threatening to disproportionately impact the city’s numerous small and medium-sized businesses (SMEs). The recent tit-for-tat tariff announcements are adding considerable pressure to an economy already grappling with one of Canada’s highest unemployment rates for large urban centres. New U.S. tariffs, reportedly at 50 per cent on nearly $20 billion worth of Canadian exports, were announced Saturday, targeting a selective list of products that include key sectors for London. Graham Henderson, CEO of the London Chamber of Commerce, warned that this isn’t just an issue for large manufacturers. “This isn’t a problem that is just facing big car manufacturers and steel manufacturers,” Henderson stated. “This is an issue that’s going to impact probably disproportionately small and medium sized businesses, of which there are 14,000, I think, in London.” The impact is already being felt by local companies. For businesses like Vaughn Hockey, which manufactures specialized goalie equipment including now-tariffed sticks, or Black Fly Beverages, a local producer of alcoholic drinks, the tariffs present immediate challenges. “If you’re making alcoholic beverages here in London and your market is in the U.S., you’re going to wake up with a 50 per cent headache,” Henderson explained. “And if your business model is based around selling into the U.S., that’s a problem.” The Chamber of Commerce’s own Op-Ed further illustrated this, noting that a 50 per cent tariff can make a product dramatically more expensive than competitors, forcing customers to reconsider purchases, turning a competitive business on Friday into one facing a “completely different commercial calculation on Monday.” This new economic challenge comes at a time when London’s unemployment rate is already among the highest for large urban centres in Canada. Graham Henderson likens the current trade conflict to the struggles faced during the 2008 recession and the COVID-19 pandemic. Historically, London has shown resilience; Henderson recalled that the city “sort of went into the recession last and came out first,” a recovery he credits to the city’s “economic diversity” in terms of sectors and export markets. The concerns extend beyond London. Sarnia Mayor Mike Bradley expressed strong support for the federal government’s response, calling it “excellent” and noting that “most Canadians” support the stance. However, he acknowledged the significant challenges ahead for Southern Ontario. “Well, right now the tariffs that are coming forward are going to be on plastic. And the auto tariffs are really disturbing because everything that goes into the automobile at some point comes through Sarnia, from the plastic, to the carbon black, to the gasoline itself,” Bradley stated, warning this could “devastate not just our local economy, not just southwestern Ontario, but the entire nation’s economy.” Henderson highlighted that while U.S. tariffs impact about five per cent of Canada’s sales into the U.S. (approximately $20 billion worth of goods), for businesses whose products fall within that five per cent, the problem is much larger. More than 700 London businesses exported roughly $7.8 billion to the U.S. in 2023, many reliant on that market. Henderson stressed that beyond direct financial costs, an “economic cost that is harder to measure” is uncertainty, making critical business decisions about hiring, investment, and expansion far more difficult when market access can change “dramatically within days.” The consequences ripple outward: If exporters lose orders, their suppliers, transportation companies, and contractors can also suffer, eventually impacting businesses that don’t export at all. The Chamber of Commerce advocates for continued efforts towards predictable U.S. market access while accelerating trade diversification.
