Introduction

In the wake of Donald Trump’s plans to impose a staggering 25% tariff on Canadian goods, Darrin Smith, owner of JessEm Tools in Moncton, New Brunswick, finds himself at a crossroads. The potential for such high tariffs has led Smith to seriously consider relocating his manufacturing operations to the United States, a decision that could have significant consequences for his business and employees.

Smith's Concerns

Smith, who has expressed his support for Trump and his conservative policies, shared his frustrations about the current state of Canada under Prime Minister Justin Trudeau’s Liberal government. With nearly 75% of JessEm Tools’ $14 million annual sales directed toward the U.S., the prospect of tariffs threatens to severely impact the profitability of his company, which employs 65 workers in Moncton’s Industrial Park West.

“I was gearing up for a hiring surge, but now we’re in a holding pattern while we monitor the situation,” Smith stated. “If these tariffs go through, we might have to cut our workforce by as much as 80%. It’s a high price to pay, but I’m prepared to make the tough choices.”

Long-term Commitment

Since launching JessEm Tools in 1998 and moving it to Moncton in 2021 for a larger facility, Smith has demonstrated a commitment to staying in Canada. However, he feels that the current government policies and the looming threat of tariffs put immense pressure on his business. “While I would prefer to fight for Canada, I have to consider all options for the viability of my company,” he said.

Industry Reactions

Smith isn’t alone in his concerns. Business organizations throughout New Brunswick are soundly warning that if Trump implements these tariffs, the repercussions will echo in the U.S. as well, given the depth of shared economic ties. Ron Marcolin, a regional vice president with Canadian Manufacturers and Exporters, pointed out that Canadian manufacturers are already taking precautions, such as hiring freezes and delayed investments. “Everyone is bracing for potential tariffs and the accompanying duties,” he explained.

The New Brunswick Business Council, which comprises influential business leaders from major firms, echoes similar sentiments. They anticipate that while larger companies might be able to withstand an economic storm for a while, a 25% tariff would still be detrimental.

Economic Analysts' Perspectives

Economic analysts are also weighing in on the potential fallout. David Campbell, a leading economic consultant, cautioned against the possibility of widespread tariffs. He noted that such measures could dramatically inflate prices for consumers in the northeastern U.S., particularly for essential goods like fuel. Many, including Campbell, argue that a trade war would primarily harm American consumers, leading to skyrocketing prices and potentially resulting in a recession.

The Irony of Tariffs

Furthermore, Smith highlighted the irony that if tariffs are enforced, the Canadian dollar’s depreciation could temporarily make Canadian goods more attractive for U.S. buyers, overshadowing the price hikes that tariffs might provoke. However, he remains skeptical about the potential for economic concessions or exemptions amid rising tensions.

Conclusion

With the looming reality of potential tariffs and the uncertainty surrounding future trade relations, New Brunswick businesses are hanging on every development in U.S.-Canadian negotiations. As for Smith, the decision to relocate remains a painful consideration, one he hopes to avoid in favor of retaining his roots in Canada. “I want JessEm Tools to be a shining example of success in New Brunswick, but if I have to leave, I will do what is necessary for my employees and my business’s survival,” he lamented.

As tensions continue to simmer, the focus now shifts to how local businesses will adapt to these changing tides, potentially reshaping the landscape of U.S.-Canada trade relations once again.