The president and chief executive officer of a Saskatoon-based mining equipment manufacturer says his company spent the last two weeks buying more American steel used in its products as Canada’s counter-tariffs kick in Tuesday.
“To make sure we had enough in stock to be able to ride out this kind of effect for as long a period as we could,” says Scott Bahr of Bit Service Company.
Canada’s counter-tariffs are in response to recent trade war escalations by U.S. President Donald Trump and equal $27.6 billion in imports from the U.S. across a variety of sectors, including steel and dairy, as well as electronics.
Bahr says his company is more affected by Canadian reciprocal tariffs than by the tariffs initially imposed by the United States because it imports more raw steel components for its manufacturing processes than it exports to the country. Now, Bahr says his company is closely watching its bottom line.
“For the short term, obviously it affects our margins, but long term it is something that does affect our competitiveness from a pricing standpoint with our clients,” he said.
For many Saskatchewan manufacturers, pivoting to Canadian or alternative sources for raw materials is not a simple solution. Bahr cites the well-regarded reputation of American products and the time-consuming nature of supply chain changes as reasons for not adapting right away.
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“It’s something again that we would not take lightly, and we would have to do from a very long-term lens, but it would have to be something that we either look to support or potentially replace existing suppliers,” he said.
One Saskatoon business association executive director says there is great potential in businesses turning to Canada amid its supply chain challenges, but also recognizes the associated challenges.
“If they can source anything local, that would be a great opportunity for us to build our own economy locally. But of course, some things are not available here in the local marketplace,” said Keith Moen, executive director of the NSBA.
Moen says small- and medium-sized enterprises are most likely to bear the brunt of counter-tariffs in Saskatoon, with uncertainties plaguing business decisions from inventory and staffing to cost and expense control.
“The concern right now is if there will be further counter-to-counter tariffs that will be applied, and I think the expectation is that there likely will,” he said.
The federal government announced additional support for Prairie small- and medium-sized businesses impacted by tariffs Tuesday, offering up to $3 million in non-repayable support through its Regional Tariff Response Initiative (RTRI) by PrairiesCan.
Allan Wiens is the CEO of farm equipment supplier SeedMaster, which is receiving more than $596,000 in federal government RTRI funding to accelerate its expansion into Australia.
Wiens says the newly imposed counter-tariffs have hit his company on the supply chain side, with about 30 per cent of his company’s materials coming from the U.S.
“I’ve had better nights of sleep, let’s put it that way,” he said.
Wiens says the uncertainty in the trade talks is the biggest impact his company is feeling so far this year. When it comes to purchasing farm equipment, Wiens says it’s an investment farmers are “not willing to make when there is so much uncertainty in the market,” ultimately impacting his company’s bottom line even if his products were not previously subject to tariffs.
“So we look at ways that we can expand as simply as possible so it doesn’t require a major redesign of our equipment,” he said.
Despite the uncertainties, manufacturers remain optimistic in their responses, drawing on past experiences to help them weather the storm.
“I would say we’re slightly, I don’t wanna say less worried, but we have a bit of practice from the effects that we went through last year,” Bahr said.
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