Tariff Troubles: How trade uncertainty is hitting immigrant businesses

The ongoing uncertainty around the U.S.-Canada tariff situation is creating significant challenges for small- and medium-sized enterprises (SMEs) across Canada. Nearly one in five (18%) SMEs are experiencing cancelled or paused orders due to the looming tariff threat, with this figure rising to 34% among exporters, according to new data from the Canadian Federation of Independent Business (CFIB).

“The uncertainty around tariffs is almost as damaging as tariffs themselves. It reverberates among business owners right now, and businesses are adjusting operations on the fly as a result,” said Simon Gaudreault, CFIB’s chief economist and vice-president of research. “While we may have a few weeks of reprieve, there is still concern about the long-term impact of tariffs on small businesses.”

The financial squeeze on SMEs

According to numbers released by CFIB, a majority (54 per cent) of SMEs say they don’t feel prepared for the impacts of U.S.-Canada tariffs. In response, businesses are adopting various strategies: 24 per cent are delaying expansion plans, 20 per cent are considering workforce reductions, and 45 per cent are searching for new suppliers. Additionally, 62 per cent of SMEs indicate they may pass on increased costs to customers if tariffs are imposed.

Indian-born Abhishek Mediratta, founder and managing partner of Fresh Burrito, a restaurant chain with 36 locations across Canada, is feeling the impact firsthand. “As a restaurant business in Canada, all our supply chains have been disrupted, and the costs of almost everything can go up by as much as 40 per cent,” he explained. “Since a majority of our produce comes from the U.S. and Mexico, we’re looking at a potential hike of 50 per cent. Prices of necessary raw materials like chicken are going up by 15 per cent, and something as basic as aluminum foil has increased by 25-40 per cent.”

Immigrant-owned businesses face unique challenges

Newcomer-owned businesses are especially vulnerable due to tighter margins and reduced flexibility, making it harder for them to scale. Jasroop Gosal, interim spokesperson and policy and research manager at the Surrey Board of Trade, in B.C, noted, “Immigrant-owned businesses tend to be more vulnerable due to their smaller size, limited financial reserves, and heavy reliance on imported products.”