Survey: Majority of Canadian Businesses Able to Weather Trade War Lasting Over 1 Year
According to a recent survey of business owners, over 67 percent of Canadian businesses believe they can withstand a trade war with the United States lasting longer than one year.
While the majority of respondents felt confident in surviving a 12-month trade conflict, 30 percent expressed concerns about facing significant profit losses if the tariff war prolonged beyond that timeframe. Additionally, 3 percent feared their companies would go out of business in such a scenario.
The survey, conducted last week, gathered input from 602 business leaders from mid-sized and large companies across various industry sectors in Canada. Approximately half of these businesses operate in industries expected to be most impacted by U.S. tariffs, namely industrial manufacturing, and energy and natural resources.
On March 4, America implemented 25 percent tariffs on Canadian exports and 10 percent tariffs on energy exports. In response, Ottawa reciprocated with tariffs on $155 billion worth of American goods, with $30 billion taking immediate effect and the remaining $125 billion going into force in 21 days. Read more…
The survey revealed that 86 percent of businesses surveyed support retaliatory tariffs against the United States, with varying levels of support across different provinces. KPMG Canadian Managing Partner Timothy Prince noted that the economic uncertainty caused by tariffs has led 76 percent of businesses to review their operations strategically.
Related Stories
Respondents also shared that companies have already started taking steps to prepare for tariffs. Some have reduced production or laid off employees in response, with potential further actions if the trade war extends for four to six months.
There is a notable level of anxiety within the business sector, with 96 percent expressing concerns about tariff payments and border crossings. Additionally, 98 percent are worried about managing pricing strategies with customers, and 95 percent are anxious about risks within their supply chains.
Prince emphasized the need for decisive action from federal and provincial governments in response to tariffs, as businesses seek support in navigating these challenges.
Among recommendations highlighted by businesses were diversifying export markets, investing in more pipeline infrastructure to reduce reliance on the United States, and removing interprovincial trade barriers. Furthermore, a significant portion of respondents mentioned redirecting sales to various markets within Canada.
