Winnipeg's small businesses worry about increased costs and lower profits due to tariffs
Businesses look for local suppliers, buyers amid double whammy of cost hikes and reduced sales
Small business owners in Winnipeg are concerned about increased costs and uncertainty over U.S. President Donald Trump's 25 per cent tariffs on Canadian goods.
The tariffs that came into effect Tuesday, and the retaliatory tariffs Canada has put in place, will make costs go up and sales go down, some said.
Winnipeg mother-and-son duo Béla and Ildiko Gyarmati, the founders of Mermaid Cove Cosmetics, an eco-conscious cosmetic line, said local businesses are disproportionately impacted by the tariffs because they have smaller margins.
"Smaller business can't absorb the costs of the inflation from this as easily," Béla Gyarmati said.
Gyarmati said 28 per cent of their orders over the past weekend were from the U.S.
And while they manufacture their products in Canada, most of their packaging materials are from the U.S., which is now shifting.
"We've overhauled our supply-chain management to exclusively source our packaging all locally within Winnipeg or Manitoba."
Three of Mermaid Cove's products were in the nominee gift bags at the 97th annual Academy Awards on March 2.
"Our business has taken off since the Oscars, " Gyarmati said. "It was a very proud moment for my mom."
While there is some fear they'll lose their American customers, they will now focus more on the local market.
"Things are changing daily, so we are trying to stay on top of everything as much as we can."
Michelle Leclair, who owns Wolseley Kombucha, said they're affected by counter-tariffs because all of their bottles come from and through the U.S.
"Some come from the U.S., some come through the U.S. from China," she said. "Our supplier will get them from the best supplier they can."
Their bottle orders are worth thousands of dollars.
A 25 per cent counter-tariff immediately raises that cost 25 per cent, "which is a lot on single-use packaging," Leclair said.
"The grab-and-go bottles are about 40 per cent of our business and margins are tight. So if it goes up 25 per cent, that's eating 25 per cent of our bottom line for that product, which is a lot."
They have yet to have a meeting about their best option, but they might look at suppliers from China or Mexico to keep that cost low.
"The only thing in sourcing directly from China, typically the minimum order quantity is a lot, so we might have to look at getting some more storage to store all the extra bottles."
Christine Merasty, owner of Indigenous gift shop Dene Cree Designs, said they export around three per cent of their products to the U.S.
"It's possible we will lose those customers as it will be costly for them to bring our products across the border," Merasty said.
Her business also imports regalia accessory kits, purses and bags from the U.S.
"I could potentially let go of lines of products that we already carry and then maybe start purchasing something different, something local."
She'll know the impact on her bottom line within six months, she said.
Trump's executive order also removed the de minimis customs exemption, which allowed Americans to bring in $800 U.S. worth of goods per recipient per day without having to pay duty on those goods.
Loren Remillard, president and CEO of the Winnipeg Chamber of Commerce, said removing that exemption is "a hard hit to the consumer."
Something as small as a $10 part for a household appliance, for example, will be subject to tariffs, Remillard said.
"It's consumers that are going to end up paying more, not just for that, but of course ultimately the price on the shelf, because of the tariffs."
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