US Isn’t a Reliable Trading Partner, 47 Percent of Canadian Small Businesses Say in New Survey
A growing number of Canadian small businesses are losing confidence in the United States as a reliable trading partner. According to a recent survey by the Canadian Federation of Independent Business (CFIB), 47% of respondents now view the U.S. as an unreliable partner. This sentiment reflects the mounting challenges caused by ongoing trade disruptions and economic uncertainty between the two nations.
Declining Confidence in U.S. Partnership
The CFIB’s findings highlight the strain on U.S.-Canada trade relations. Recent U.S. trade policies, including tariffs on Canadian imports, have played a significant role in this shift. For example, steel and aluminum imports now face a 25% tariff, with reciprocal tariffs between the two countries expected to escalate further.
Strategic Adjustments in Response to Trade Challenges
To navigate these challenges, Canadian small businesses are making significant strategic changes. Key adjustments include:
- Shifting to Domestic and International Markets: 32% of business owners have already transitioned to Canadian suppliers and markets, while 27% plan to increase domestic investments.
- Reducing U.S. Engagement: Around 33% of businesses intend to reduce their reliance on the U.S. over the next six months.
- Promoting Canadian-Made Products: Efforts to prioritize locally-produced goods are on the rise.
- Exploring Alternatives Abroad: Many companies are seeking opportunities in non-U.S. international markets to diversify their operations.
Challenges and Uncertain Outcomes
Despite these efforts, optimism among business owners remains low. Only three in 10 businesses believe their strategic adjustments will effectively offset the effects of the trade war. Challenges such as rising costs, a declining Canadian dollar, and unpredictable trade policies make planning and adaptation difficult for many businesses. Nearly 90% of business owners report struggling to plan effectively under the current conditions.
Compliance and Government Support
Trade compliance adds another layer of complexity. While most U.S. exporters offer goods compliant with the Canada-United States-Mexico Agreement (CUSMA), 30% of Canadian business owners remain uncertain about their compliance status. Furthermore, about half of respondents expressed the need for government assistance to manage the paperwork associated with CUSMA.
Broader Impacts on Economic Confidence
The trade war’s ripple effects are evident in the broader economic outlook:
- Reduced Expansion Plans: Many businesses are delaying or canceling expansion projects.
- Diminished Optimism: Business confidence is at historically low levels, exacerbated by rising operational costs and economic uncertainty.
Policy and Advocacy
In light of these challenges, CFIB is urging political leaders to prioritize small business issues in their policy platforms. Recommendations include eliminating internal trade barriers within Canada and reducing the tax burden for small businesses to foster confidence and economic growth.
Survey Methodology
The CFIB’s survey, conducted between March 13 and March 20, 2025, received nearly 3,000 responses from Canadian independent business owners across various sectors. The results have a margin of error of ±1.8%, 19 times out of 20.
This ongoing trade conflict underscores the need for policy measures that provide clarity and support to small businesses, many of which are navigating significant uncertainty in their pursuit of sustainable growth and operations.
US Isn’t a Reliable Trading Partner, 47 Percent of Canadian Small Businesses Say in New Survey
A growing number of Canadian small businesses are losing confidence in the United States as a reliable trading partner. According to a recent survey by the Canadian Federation of Independent Business (CFIB), 47% of respondents now view the U.S. as an unreliable partner. This sentiment reflects the mounting challenges caused by ongoing trade disruptions and economic uncertainty between the two nations.
Declining Confidence in U.S. Partnership
The CFIB’s findings highlight the strain on U.S.-Canada trade relations. Recent U.S. trade policies, including tariffs on Canadian imports, have played a significant role in this shift. For example, steel and aluminum imports now face a 25% tariff, with reciprocal tariffs between the two countries expected to escalate further.
Strategic Adjustments in Response to Trade Challenges
To navigate these challenges, Canadian small businesses are making significant strategic changes. Key adjustments include:
- Shifting to Domestic and International Markets: 32% of business owners have already transitioned to Canadian suppliers and markets, while 27% plan to increase domestic investments.
- Reducing U.S. Engagement: Around 33% of businesses intend to reduce their reliance on the U.S. over the next six months.
- Promoting Canadian-Made Products: Efforts to prioritize locally-produced goods are on the rise.
- Exploring Alternatives Abroad: Many companies are seeking opportunities in non-U.S. international markets to diversify their operations.
Challenges and Uncertain Outcomes
Despite these efforts, optimism among business owners remains low. Only three in 10 businesses believe their strategic adjustments will effectively offset the effects of the trade war. Challenges such as rising costs, a declining Canadian dollar, and unpredictable trade policies make planning and adaptation difficult for many businesses. Nearly 90% of business owners report struggling to plan effectively under the current conditions.
Compliance and Government Support
Trade compliance adds another layer of complexity. While most U.S. exporters offer goods compliant with the Canada-United States-Mexico Agreement (CUSMA), 30% of Canadian business owners remain uncertain about their compliance status. Furthermore, about half of respondents expressed the need for government assistance to manage the paperwork associated with CUSMA.
Broader Impacts on Economic Confidence
- Reduced Expansion Plans: Many businesses are delaying or canceling expansion projects.
- Diminished Optimism: Business confidence is at historically low levels, exacerbated by rising operational costs and economic uncertainty.
Policy and Advocacy
In light of these challenges, CFIB is urging political leaders to prioritize small business issues in their policy platforms. Recommendations include eliminating internal trade barriers within Canada and reducing the tax burden for small businesses to foster confidence and economic growth.
Survey Methodology
The CFIB’s survey, conducted between March 13 and March 20, 2025, received nearly 3,000 responses from Canadian independent business owners across various sectors. The results have a margin of error of ±1.8%, 19 times out of 20.
This ongoing trade conflict underscores the need for policy measures that provide clarity and support to small businesses, many of which are navigating significant uncertainty in their pursuit of sustainable growth and operations.
Conclusion
The survey conducted by the Canadian Federation of Independent Business (CFIB) reveals a significant decline in confidence among Canadian small businesses regarding the U.S. as a reliable trading partner. With 47% of respondents expressing skepticism, the findings underscore the growing challenges posed by trade disruptions, tariffs, and economic uncertainty. While many businesses are adapting by shifting to domestic markets, reducing U.S. engagement, and exploring alternative international markets, optimism remains low. The ongoing trade conflict highlights the need for policy measures that provide clarity and support to small businesses, enabling them to navigate these uncertain times and pursue sustainable growth.
Frequently Asked Questions
What percentage of Canadian small businesses view the U.S. as an unreliable trading partner?
According to the CFIB survey, 47% of Canadian small businesses now view the U.S. as an unreliable trading partner.
What U.S. trade policies have impacted Canadian businesses?
Recent U.S. trade policies, including tariffs on Canadian imports such as steel and aluminum (25% tariff), have significantly impacted Canadian businesses and contributed to declining confidence in the U.S. as a reliable partner.
How are Canadian businesses responding to trade challenges?
Canadian businesses are making strategic adjustments, including shifting to domestic and international markets, reducing U.S. engagement, promoting Canadian-made products, and exploring non-U.S. international markets.
What challenges are Canadian businesses facing due to the trade war?
Challenges include rising operational costs, a declining Canadian dollar, unpredictable trade policies, and compliance complexities under the Canada-United States-Mexico Agreement (CUSMA).
How has the trade conflict impacted economic confidence?
The trade conflict has led to reduced expansion plans, delayed or canceled projects, and historically low levels of business confidence among Canadian small businesses.
What policy recommendations has the CFIB made?
The CFIB has urged political leaders to prioritize small business issues, including eliminating internal trade barriers within Canada and reducing the tax burden on small businesses to foster confidence and economic growth.
