Manitoba industries disappointed 'destructive' trade war with U.S. going ahead

Some Manitoba business representatives expect the U.S.'s decision to slap a 25 per cent tariff on Canadian goods will harm both sides in the trade war even if they're lifted in the short term.

President Donald Trump said Monday there was "no room left" for Mexico and Canada to stop the levies on exports to the U.S., which came into effect midnight on Tuesday.

"They have the potential to be very destructive to our industry," said Aaron Dolyniuk, executive director of the Manitoba Trucking Association.

About 41 per cent of freight in Manitoba revolves around cross-border trade, Dolyniuk said, with some businesses having already started to slow down amid the U.S. president's tariff threats.

"Short-term impacts are likely going to be very large, hurting a lot of companies," he said.

"I am concerned about some of our members.… They've built their businesses, in some cases over decades, and something like this could have a very large impact in a very short period of time."

The trade relationship between both countries was worth about $1.3 trillion in 2023, with $3.6 billion in goods crossing the border every day.

Terry Shaw, Prairies vice-president for the Canadian Manufacturers & Exporters Association, said a recent CME survey found nearly 50 per cent of respondents would freeze hiring or lay people off if tariffs where imposed.

"We've heard some members are already laying people off," Shaw said.

"In terms of cost absorption, the options are really limited. Just over one in 10 … of our members surveyed nationally say they can fully absorb the tariff costs. But even then, only on a short-term basis."

Trump said he was imposing the tariffs to punish Mexico and Canada because they're not doing enough to stop the flow of drugs and migrants into the U.S. 

The U.S. paused them in February after both countries made a series of commitments on border security, including a $1.3-billion border security plan that had been previously announced by the Canadian government.

Consumers will bear costs: Bioscience association

Foreign Affairs Minister Mélanie Joly said Monday the country was ready to impose counter-tariffs against $155 billion in American goods. The first tranche of tariffs went into effect at midnight.

"There is the possibility of being harmed kind of twice," said Andrea Ladouceur, CEO of the Bioscience Association of Manitoba. "We do import a lot of ingredients from the U.S. as well."

The province exported $2.3 billion worth of medicine to the U.S. in 2023 — the biggest export to the U.S. in dollar terms according to provincial statistics.

"What's been talked about in the media from the beginning is [costs] will simply be passed along to consumers," Ladouceur said. "We believe that will happen."

Pork Manitoba braces for worst-case scenario

Cam Dahl, general manager with Manitoba Pork, said the industry is still in "wait-and-see" mode, but that they've been preparing for a worst-case scenario.

Manitoba — the largest pork exporter in Canada — exported about $368 million worth of pork and pork products to the U.S. last year, according to provincial statistics.

Ninety-eight per cent of live hogs exported in 2024 were also destined for the U.S.

"The pork sector supports 22,000 jobs in Manitoba," Dahl said. "It is going to have an impact on jobs across the province … and quite frankly, it's gonna hurt U.S. farmers and … consumers."

Steel distributor hopeful for deal

Justin Copp with Brunswick Steel, a Winnipeg-based steel distributor, said he'd already been bracing for the impact of a looming 25 per cent levy on global steel and aluminum imports to the U.S. set to come into effect on March 12.

The industry was also the target of U.S. levies during the president's first term.

Copp said they are better prepared for a trade war this time around, but that business still has slowed down.

"With the U.S. administration, I take it a little bit with a grain of salt," he said, adding he expects the tariffs won't be in place for too long.

"I'm still hopeful that a deal will be made, [but] even with that, it's going to take a little bit of time to recover from what we've already seen."

Liz Kovach, president of Supply-Build Canada — which represents lumber retailers — said the trade dispute highlights the need to remove of internal trade barriers and other red tape so the country can reduce its dependence on the U.S.

On Saturday, the U.S. said it was launching a new trade investigation into Canadian softwood lumber, potentially opening the industry to more anti-dumping duties in the latest salvo of the nearly half-century trade spat between both countries.

Kovach said the trade war will slow down construction of new housing in Canada and the U.S.

The tariffs will "inflate prices, and it might create some delays in decision-making, or it might halt some projects completely," Kovach said.

"Thirty per cent of the material we produce in Canada goes south of the border," she said. "We know that that extra 25 per cent … is definitely going to hurt their economy."