Small businesses along the Detroit and St. Clair Rivers are bearing the brunt of recent tariff policies as cross-border trade between the U.S. and Canada faces mounting pressures and uncertain futures.
At a Glance
- U.S. tariffs on Canadian goods are causing increased costs and supply chain disruptions for small businesses on both sides of the border
- Canadian businesses exporting to the U.S. face reduced competitiveness as their products become more expensive for American buyers
- Border towns like Port Huron are experiencing economic pressure due to declining Canadian visitors
- A 90-day pause on certain tariffs has been implemented, but businesses remain uncertain about future trade policies
- Small business owners are implementing cost-cutting measures including pausing hiring, delaying growth plans, and considering layoffs
Border Businesses Under Pressure
Small businesses along the U.S.-Canada border, particularly those near the Detroit and St. Clair Rivers, are facing severe economic challenges due to recent tariff policies. These family-run establishments, which have historically relied on cross-border trade, are experiencing disrupted supply chains, increased costs for imported goods, and reduced competitiveness in international markets. For Canadian businesses, exporting to the U.S. has become increasingly difficult as their products become more expensive for American buyers, leading to decreased demand and revenue losses.
The impact extends beyond just manufacturers and exporters. Retail establishments, restaurants, and service industries in border towns are reporting significant drops in business as Canadian visitors decrease. These communities have historically thrived on cross-border shopping and tourism, creating a symbiotic relationship that is now under threat. The economic ripple effects are being felt throughout these border regions, affecting employment, local tax revenues, and community stability.
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Business Owners Voice Concerns
Business owners across various sectors are expressing deep concerns about their ability to remain viable under current trade conditions. Many report being caught in an impossible situation: absorbing the increased costs would eliminate already thin profit margins, while passing costs to customers risks pricing themselves out of the market. The uncertainty of the situation has led many to pause expansion plans, halt hiring, and in some cases, consider layoffs or even closure.
“I recently ordered a batch of linen from my supplier in Lithuania that I’ve been working with for years. On a $8,400 order, I was charged over $1,000 in tariffs. With already small margins, I don’t know how I can continue offering my handmade goods at the quality and price I have been. It is disheartening and frustrating,” said Elana Gabrielle, owner and designer.
While a 90-day pause on certain tariffs has provided temporary relief, the short timeframe offers little comfort to businesses that operate on longer planning cycles. Manufacturing lead times and shipping durations often exceed this window, leaving business owners hesitant to make major investments or inventory purchases without knowing what tariff rates will apply when goods arrive. This continuing uncertainty is hampering business planning and growth across border communities.
— Caixin Global (@caixin) April 9, 2025
Adapting to the New Reality
Faced with these challenges, small businesses are developing strategies to adapt. Some are diversifying their supplier and customer bases to reduce dependence on cross-border trade. Others are exploring opportunities to source more materials domestically, though this often comes with higher costs or limited availability. Business owners are also seeking financial relief through government programs, though these are often limited in scope and require proof of significant hardship to qualify.
“The 90-day pause is definitely a step in the right direction, but we’re still in a holding pattern because we have to factor in manufacturing and transit time, which will exceed the 90-day window. Until there’s more certainty that the tariffs are going to stay at the rate during this pause, we’re hesitant to take that big of a risk. It could be really costly if the 90-day pause reverts to where we are currently,” Amanda Haddaway, owner, Lucky D Distilling Company.
The Canadian government has implemented counter-tariffs and offers some financial support programs for affected businesses. However, many small business owners report that navigating these programs can be complex and time-consuming. Meanwhile, organizations on both sides of the border are advocating for clearer, more consistent trade policies that acknowledge the unique economic ecosystem of border communities and the interdependence of the U.S. and Canadian economies.
