Waterloo Region community weighs in on Canada-U.S. trade tensions

The tariffs introduced on both sides of the border could have an impact in Waterloo Region. CTV's Hannah Schmidt explains how.

As trade tensions between Canada and the U.S. escalate, the Waterloo Region community is bracing for potential economic fallout.

With new tariffs, supply chain disruptions, and rising costs on the horizon, the impact is being felt across industries from manufacturing to hospitality.

For Ethel’s Lounge in Waterloo, come next week, their beverage menu could look a lot different.

“Taking off American liquors off shelves and stuff like that at the LCBO, just thinking how it’s going to reflect our menu and what we’re able to bring in for our customers,” said bar manager, Jimmy McDonald.

McDonald says the bar is also bracing for potential price hikes on U.S. imports.

“We’ll wait and see on Tuesday with our Sysco orders - how much is a box of lettuce going to cost us? How much is cheese going to go up? Obviously, it would be more expensive for us to get if we do get them from the States.”

‘It’s going to mean unemployment’

With Canada relying on the U.S. for over 70 per cent of its exports, any disruption in trade can have widespread effects.

“It’s going to mean unemployment,” former Canadian diplomat, Colin Robertson, told CTV News. “It’s going to mean higher costs for both sides. As the Prime Minister said in his announcement last night, ‘no, this is a downer for the economies of both countries.’”

Robertson believes this will force Canada to rethink its dependence on the U.S.

“I think it’s going to force us to both diversify trade at the same time, put our own house in order, and that means reducing all the internal trade barriers that we have between provinces.”

How will businesses be impacted?

The Canadian Chamber of Commerce is closely monitoring the situation, with concerns that prolonged trade issues could push some businesses to adjust their supply chains, rethink pricing and relocate operations.

“The American people did vote for President Trump in the hopes of getting prices going down,” said Alex Greco, senior director of manufacturing and value chains with the Canadian Chamber of Commerce. “But these tariffs will have the opposite effect and punish Canadian and American manufacturers alike. The cost of everything will go up from production costs, raw materials, shipping.”

Greco warns that if this dispute escalates, the Waterloo Region could feel the impact in more ways than one.

“In the Waterloo Region alone, advanced manufacturing supply chains, they remain a single largest industry sector,” he said. “Approximately 1,400 automotive, aerospace and food processing companies are located right in Waterloo Region. That’s one in five local workers… we have to look at how do we ensure that there’s immediate relief to ensure that we’re preventing job losses and temporary layoffs in Kitchener-Waterloo’s economy?”

Political expert warns of long-term effects

According to a local political analyst, trade disputes between Canada and the U.S. are nothing new, but this one has the potential for lasting consequences.

“The last time that Trump was in office and put on tariffs, American manufacturers, which Trump praises, were very much in difficulty because their input cost went up and that created inflation, which lasted into the Biden administration,” explained Peter Woolstencroft, a retired University of Waterloo political sciences professor. “So there will be a big fear in the United States that all of this is going to result in more inflation, higher inflation in the United States. And I hear people say food prices are going up and they’re going to go up in Canada this year regardless of all of this business.”

Woolstencroft also warns that President Donald Trump could strike back following Canada’s order of retaliatory tariffs.

“This is brutal politics; we have to wonder very much about…what Trump will do in retaliation to Trudeau’s retaliation to Trump. So this is this is a terrible situation for Canada. Let’s say he raised the tariffs another 25 per cent, there’s no good news there. And we don’t have anything to hit back. So our economy would be severely hurt and we would be in a deep recession.”