For the CEO of Quebec furniture retailer Meubles RD, the response to Canada’s counter-tariffs on imports from the United States is simple: Liquidate remaining American stock, pause orders on those items and wait it out.
“We don’t want to pass those increases on to our customers,” Isabelle Beauregard told The Gazette. “We’ll steer them toward other products.”
Canada’s counter-tariffs on a range of products came into effect Tuesday, 2½ weeks after the U.S. applied 50 per cent tariffs on roughly $28 billion of Canadian imports.
While the trade war ramped up between the neighbouring countries, Quebec retailers braced for impact — some by stockpiling American products before Tuesday, others by trying to diversify their offerings. But difficulties and uncertainty remain, for both the businesses themselves and for consumers, who have yet to see how counter-tariffs will affect product pricing.
At Meubles RD, a decision was made early on in U.S. President Donald Trump’s trade war to stop selling pieces of American furniture.
“Customers were reluctant to buy them,” Beauregard said.
The latest developments, which come a year and a half later, affect only appliances at Meubles RD, for which there is no local alternative. The plan is to suggest South Korean brands Samsung and LG instead.
“We’ll diversify, but I know consumers are already tight on budget,” Beauregard said, adding that the company has been seeing a higher number of replacement purchases (when an item breaks) rather than bundling purchases (when consumers buy a new set).
As for how counter-tariffs will affect the business and its employees, Beauregard said she’s “keeping several action plans in mind to implement if necessary.”
The situation is a bit more complex for Jacinthe Pilote, owner of Plateau-Mont-Royal publishing house and boutique Paperole.
The specific type of paper she uses to make greeting cards comes from the U.S., and while she attempted to place a relatively large order ahead of time, her printer said he still hadn’t received it on Tuesday.
“It may be that I have no choice but to temporarily switch my paper supplier,” she said, adding there is no local alternative for the type she uses. “It’s certainly not the paper we like.”
Pivoting amid the trade war has been difficult for Pilote, who learned to diversify her offerings during the COVID-19 pandemic. While governments are encouraging Canadian retailers and consumers to buy local, Pilote said she’s been having a hard time finding Canadian products with the required French labelling.
“When it comes to Quebec, we’re … doubly isolated,” she said. “We’re ending up even worse off than everyone else.”
While Pilote has struggled to find goods that adhere to labelling laws, Canadian Prime Minister Mark Carney cited proposed French language concessions related to labelling as one of the reasons the trade deal with Trump fell through in the final hour in August.
“I found it so hypocritical because I try to buy Canadian products for the store — I’m all about that,” Pilote said. “But I can’t buy the products I want, because they’re not translated into French.”
The Retail Council of Canada said it’s aware of such issues.
“She is identifying a big challenge of what’s required when we try to upend the whole system and try to find new suppliers overnight. And frankly, in many cases they either don’t exist, or if retailers will have had decades-long relationships with some suppliers, they’re just not gonna end overnight, right?” said Matt Poirier, vice-president of government relations for the Retail Council of Canada.
If businesses aren’t able to pivot — for whatever reason — “they just end up getting hit with the tariff,” Poirier said. “To the degree they can absorb it, great, but at 50 per cent, that’s pretty tough. … So that cost just has to be passed on to the consumer. There’s no leeway left.”
For products that don’t have alternatives, the timeline as to when prices will increase for consumers will depend on what retailers were able to bring into Canada before the deadline and how long that stock lasts, Poirier explained.
He pointed out that items like furniture, clothing and sporting equipment can be stored indefinitely, but that the counter-tariffs also apply to some perishable food items.
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In an emailed statement Tuesday, a spokesperson for Metro — which owns supermarkets and pharmacies in Quebec with products that will be affected — said it has received notice from some suppliers about potential pricing impacts. Ines El Khlifi said the company is reviewing the information and assessing impacts on businesses and customers, noting it’s too early to determine “broader implications.”
“We remain focused on offering our customers the best possible value and will continue to work closely with our suppliers as the situation evolves,” the statement reads.
Pilote, meanwhile, said she doesn’t plan to increase her prices for the time being — even though Trump’s tariffs have effectively ruined her U.S. customer base over complications at customs, representing about one to two salaries at Paperole.
“We’ll absorb the costs for now, I imagine, and wait and see,” Pilote said. “With Trump, it’s like one day he says one thing, and the next day we don’t know. Two weeks from now, it could change. I have no idea.”
Read More: Montreal retailers turn their backs on U.S. goods as counter-tariffs come into force