The Tariff Tangle: How Tariffs Impact Small Businesses

Understanding Tariffs and Their Impact on Small Businesses

At AnGel Moss, we are committed to providing premium sea moss products while navigating the complexities of global trade. One of the major factors influencing pricing, supply chains, and product availability is tariffs. If you're a consumer or small business owner, understanding tariffs can help you make informed decisions about purchasing, sourcing, pricing, and overall business strategy.

 

What Exactly is Happening?

President Trump / The U.S. has imposed a 25% tariff on American goods, and Canada has responded with its own measures. This means higher costs for imported products, supply chain disruptions, and potential price increases for all, but particularly small businesses relying on cross-border trades. (Read More Here)

 

What Are Tariffs?

Tariffs are taxes imposed on imported goods by governments. These taxes can be set for various reasons, such as protecting domestic industries, generating revenue, or responding to international trade disputes. When a country applies tariffs to a specific category of goods, it increases the cost of importing those products, which can have a ripple effect on businesses and consumers.

 

How Do Tariffs Work?

A tariff, which is a tax imposed by a country on imported or exported goods, is generally collected and enforced by a country’s customs authority or agency. For example, in Canada, the Canada Border Services Agency (CBSA) administers duties and taxes on imported goods, including tariffs. Tariffs are generally imposed in addition to any customs duties that apply to a specific product. Then, GST and provincial taxes also apply (but can later be recovered in some cases).

 

Who pays tariffs?

As tariffs are in fact, duties, the importer of record is generally responsible for paying any duties/tariffs that are applied. The importer of record could be the buyer or the seller (or some other person). The cost of tariffs is generally ultimately passed on to the final user or consumer.

 

What US imports are subject to new tariffs? 

On March 4, 2025, the federal government announced it will move forward with a 25% tariff on $155 billion in goods imported from the United States. Tariffs will apply immediately to a list of goods worth $30 billion. These initial tariffs affect a variety of goods, including orange juice, peanut butter, wine, spirits, beer, coffee, appliances, apparel, footwear, motorcycles, cosmetics, and certain pulp and paper products.

The government also announced it will impose additional countermeasures on $125 billion in imports from the United States, drawing from a list of goods open for a 21-day comment period. The list includes products such as electric vehicles, fruits and vegetables, beef, pork, dairy, electronics, steel, aluminum, trucks, and buses.

 

How Tariffs Affect (Small) Businesses

For businesses like AnGel Moss, tariffs can impact costs in several ways:

1. Increased Costs – If tariffs are imposed on imported product, supplies or packaging materials, the costs of production rise. This may lead to price adjustments for consumers.

2. Supply Chain Disruptions – Tariffs can complicate international trade agreements, causing delays and increasing logistical challenges.

3. Competitive Pricing Challenges – Large corporations can sometimes absorb tariff-related costs more easily than small businesses, making it harder for smaller brands to compete. In other words, reduced profit margins that make businesses much harder to sustain.

4. Innovation Limitations – Higher costs may reduce the ability to restock, produce, and  invest in research, development, and new product lines.

 

Navigating Tariff Challenges

While tariffs present challenges, there are ways to adapt and thrive:

• Exploring Alternative Suppliers – Diversifying suppliers can help mitigate risks and reduce costs. If you're a Canadian consumer or brand, consider AnGel Moss for your premium sea moss fulfilment.

• Advocating for Policy Changes – Small business owners can engage with industry organizations and policymakers to voice concerns about tariff impacts.

• Educating Consumers – Transparency about pricing and trade challenges fosters consumer loyalty and understanding.

• Optimizing Operations – Improving efficiency in production, packaging, and shipping can offset some of the financial burdens caused by tariffs.

 

What Can We All Do To Alleviate Some Pressure?

We’ve gathered some resources to help you and the businesses you enjoy navigate these changes.

Government Support Programs:
The Canadian government is aiming to offer tariff relief programs to help businesses affected by U.S. tariffs. Find out if you qualify for tariff exemptions or financial support.

Supplier & Inventory Strategies
Consider diversifying your suppliers and sourcing locally to reduce reliance on U.S. imports. Need help finding local suppliers? Leave a comment below.

Financial Planning & Grants
Organizations like the Business Development Bank of Canada (BDC) provide resources & funding to help small businesses adjust to economic changes.

Education & Workshops
Programs like the Trade Accelerator Program (TAP) can help you navigate tariffs, expand into new markets, and maintain resilience.

Advocacy & Networking
Local chambers of commerce are actively supporting businesses impacted by tariffs, such as the Ontario Chamber of Commerce.

 

Federal Relief For Businesses 

The federal government is also proposing measures to ease the effects of the countermeasures on Canadians by launching a process to allow businesses to request exceptional relief from the tariffs. This “remission process” will allow Canadian businesses to request relief from the payment of tariffs or a refund of tariffs already paid. The federal government said it will consider requests for remission of tariffs that apply beginning on March 4, 2025 to address:  

• Situations where goods used as inputs can’t be sourced domestically (on a national or regional basis) or reasonably from non-US sources. 
• Other exceptional circumstances that could have severe adverse impacts on the Canadian economy (on a case-by-case basis).

If the federal government decides to impose further tariffs, it notes that the remission process will also be available for those goods.  

 

Provincial Response

In addition, many of Canada’s provinces have proposed countermeasures to the tariffs, as of March 4, 2025.

British Columbia

BC Premier David Eby has directed the BC Liquor Distribution Branch to stop purchasing American liquor immediately from Republican-led "red states” and remove American brands from public liquor store shelves. He also directed the BC government and Crown corporations to buy Canadian goods first and prioritize BC products. Eby also announced that there will be support for businesses and individuals but didn’t provide further details at this time.

Manitoba

Manitoba Premier Wab Kinew announced the province will pull American liquor off the shelves. He also promised help for those affected by economic fallout resulting from tariffs.

Newfoundland and Labrador

Newfoundland and Labrador Premier Andrew Furey announced the province will pull American liquor off the shelves. He also announced that the province will be reviewing and stopping immediately, where possible, procurement from the United States.

Nova Scotia

Nova Scotia Premier Tim Houston has directed the Nova Scotia Liquor Corporation (NSLC) to remove American liquor from stores. In addition, the province will seek opportunities to cancel existing contracts with American businesses, ban American businesses from bidding on provincial procurements, and reject existing bids . Houston will also double the cost of tolls at the Cobequid Pass for commercial vehicles from the US.

Ontario

Ontario Premier Doug Ford has ordered the Liquor Control Board of Ontario (LCBO) to remove American products, effective March 4, 2025. As the only wholesaler of alcohol in the province, the LCBO will also remove American products from its catalogue so that Ontario-based restaurants and retailers can't order or restock US products. Ontario is also banning American companies from provincial contracts until the tariffs are reversed. In addition, Ford says the province will end its $100-million deal with Starlink.

Quebec

Quebec Premier François Legault has directed the Société des alcools du Québec (SAQ), to remove all American products from its shelves, starting March 4, 2025. He also instructed the SAQ to halt the supply of American alcoholic beverages to grocery stores, restaurants, and bars. Additionally, Quebec will impose penalties of up to 25% on bids by American companies who participate in public calls for tenders, if those companies aren’t already established in the province.

Legault also announced a new program that will offer loans up to $50 million. The intent is to give companies time to adjust their business models or supply chains over the next 12 months.

New Brunswick 

New Brunswick Premier Susan Holt announced its four-pillar response to US tariffs. The plan includes:

• Relief for businesses: Includes a new program targeted to export-intensive companies called the Competitive Growth Program intended to enhance the long-term sustainability of these businesses, and additional investment in the New Brunswick Fisheries Fund to support seafood producers.
• Support for individuals and communities: Includes flexible labour market support program to provide services to those whose jobs have been impacted by tariffs, as well as a contingency fund to provide support for affected communities.
• Broaden interprovincial trade: Includes a commitment to work with other provinces to reduce interprovincial trade barriers and improve the flow of goods and services within Canada.
• Promote buying local: Includes further promotion of the “New Brunswick Made” campaign to make it easier for residents to identify locally made items.

These measures are in addition to previously announced measures to:

• Remove US alcohol from NB Liquor shelves, as well as no longer purchase any alcohol from the US.
• Sign no new contracts with US companies. 
• Work with the other Atlantic provinces to find new markets for items traditionally exported to the US, like seafood and lumber.

Prince Edward Island 

PEI Premier Rob Lantz announced that the province will take several measures to support businesses to support local businesses, including to:

• Double the number of trade missions operated by Innovation P.E.I. and offering export companies across the Island support to join those missions.
• Continue to work on strengthening new markets in other parts of Canada, as well as Europe, southeast Asia, Mexico and the Caribbean.
• Introduce an export enhancement and diversification fund to provide non-repayable assistance to sectors affected by the changes, and will cover up to 60% of eligible costs to a maximum of $32,000.
• Increase investments in the product and market development program, the strategic industry growth initiative and the business development program.
• Remove all American products from liquor store and outlet shelves.

Impact to Canadian Businesses and the Economy 

The imposition of these tariffs is expected to have significant repercussions for Canadian (and American) businesses, and the broader economy. If Canadian businesses act as the importer of record, they will face higher operational costs, which can squeeze profit margins, reduce cash flow, and limit their ability to reinvest in growth. If increased costs are passed on to Canadians, it may contribute to inflation.

On the other hand, if US purchasers act as the importer of record, higher prices could reduce demand for Canadian goods, leading to a decline in exports. This is particularly concerning for vulnerable industries like manufacturing, energy, forestry, and aerospace which rely heavily on US markets. Analysts from the Bank of Canada warn that a drop in exports could weaken Canada’s GDP, slow economic growth, and increase unemployment. 

Overall, these tariffs create financial uncertainty for Canadian companies, disrupt trade relationships, and put downward pressure on economic growth. Without effective countermeasures or alternative markets, Canada risks slower economic expansion and potential long-term challenges for key industries.

 

Announcement Timeline:

(Click the date for the drop down menu with details to flow.)

Update: March 6, 2025

The US has delayed the 25% tariff on goods from Canada and Mexico that fall under CUSMA/USMCA to April 2, 2025.

Update: March 5, 2025

The US is granting a temporary 30-day tariff exemption for automakers and related parts, at the request of certain car makers that would qualify under CUSMA/USMCA.

Update: March 4, 2025

The US implemented tariffs, imposing a 25% levy on all Canadian imports of goods, with the exception of energy products that are subject to a 10% tariff. In response, Canada has imposed a 25% tariff on $30 billion worth of specifically identified American goods coming into Canada immediately. Canadian retaliatory tariffs will then be expanded to an additional $125 billion worth of US goods in the next 21 days, which may allow Canadian companies additional time to plan and find alternative suppliers.

Update: February 27, 2025

US President Donald Trump says he will end a month-long pause and impose a 25% tariff on most Canadian imports, and 10% on energy, starting March 4, 2025. He reiterated that in addition reciprocal tariffs will begin on April 2, 2025.

Additionally, Trump plans to also implement a 25% tariff on imports from Mexico and an additional 10% tariff on imports from China, also beginning March 4.

Update: February 13, 2025

US President Donald Trump has announced the potential of reciprocal tariffs on imported goods on Thursday, February 13th. These new tariffs will not be imposed immediately but are to be reviewed by his trade and economic team who are to provide a report and presumably recommendations by April.

These additional tariffs are aimed at countries that currently impose tariffs (or other charges) on imports from the US. Trump stated that the tariffs would vary depending on the specific rates imposed by each country and that they’d be “no more, no less” than what the US is charged.

Update: February 11, 2025

Despite the previous agreement to delay any tariffs for at least 30 days, President Donald Trump signed orders on February 10 imposing 25% tariffs on all steel and aluminum imports—including imports from Canada—to take effect on March 12, 2025.

Update: February 4, 2025

Proposed tariffs between Canada and the US have been delayed for at least 30 days, according to a social media post from Prime Minister Justin Trudeau.

 

The Future of Tariffs and Small Businesses

Trade policies and tariffs evolve over time, influenced by political, economic, and global events. At AnGel Moss, we remain committed to adapting to these changes while ensuring that our customers continue to receive the highest quality sea moss products that you know and love.

As we navigate these complexities, we encourage open dialogue with our customers and fellow business owners. Have questions or insights about how tariffs affect your purchasing decisions? Let us know in the comments below!

 

Additional Sources:

• https://www.canada.ca/en/department-finance/programs/international-trade-finance-policy/canadas-response-us-tariffs.html (also header image source)
• additional images: shutter stock