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For months, Canadian businesses have been trying to manage the uncertainty created by an escalating trade dispute with the United States.
For some London businesses, that uncertainty became considerably more real on Saturday.
New U.S. tariffs of 50 per cent took effect on nearly $20 billion worth of Canadian exports. The list is selective rather than economy-wide, but it reaches into product categories that are very much part of London's economy, including alcoholic beverages, sporting goods, certain manufactured products, building materials and other goods.
The national numbers can make the impact sound more manageable than it really is.
About five per cent of Canadian exports to the United States are covered by these latest tariffs. For a business whose product happens to fall within that five per cent, the problem is much larger.
Imagine a London company producing an alcoholic beverage that has spent years developing customers and distributors in the United States. A 50 per cent tariff can suddenly make that product dramatically more expensive than competing American products.
Or consider a local manufacturer of sporting goods selling into the U.S. market. Its equipment may be highly specialised and its reputation may have taken years to build. A tariff of this size can still force customers to reconsider where they buy.
The same problem can arise for manufacturers of electronics, construction products or other goods included within the affected tariff classifications. A company can be competitive on Friday and face a completely different commercial calculation on Monday.
London has considerable exposure to this kind of disruption.
More than 700 London businesses exported approximately $7.8 billion worth of goods to the United States in 2023. Much of that activity is connected to manufacturing and transportation, but our export economy extends well beyond those two sectors.
London companies manufacture beverages, food products, electronics, sporting goods, construction products, machinery and highly specialised components. Many are small and medium-sized businesses. They employ Londoners, purchase from other local businesses and have spent years building relationships with customers on both sides of the border.
Those businesses cannot simply replace the United States as a customer overnight.
Finding new international markets is sensible and Canada should accelerate that work. It takes time. Distribution networks have to be built. Products may need different regulatory approvals. New customer relationships have to be developed. Geography also continues to count, and London sits only a few hours from one of the largest markets in the world.
There is another economic cost that is harder to measure: uncertainty.
Businesses make decisions about hiring, equipment, expansion and new markets based on some reasonable expectation of what the trading environment will look like.
Should a manufacturer add another shift? Buy a new piece of equipment? Expand its plant? Hire more people? Pursue another American customer?
Those decisions become harder when access to your largest export market can change dramatically within days.
The consequences also extend beyond the exporting company itself.
If an exporter loses orders, its suppliers can lose business. Transportation companies carry fewer loads. Equipment purchases are postponed. Contractors lose work. Hiring slows. Eventually the effects can reach businesses that never export anything at all.
Canada needs to continue working toward predictable access to the American market while accelerating the diversification of our international trade.
Governments should also recognise that smaller exporters may be especially vulnerable. They generally have fewer markets, less financial capacity to absorb a sudden disruption and fewer resources available to navigate increasingly complicated trade rules.
Here in London, we have work to do as well.
We should be helping businesses understand their exposure, identify new opportunities, diversify where practical and strengthen the local and Canadian supply chains that support them.
London has built a sophisticated and increasingly diverse export economy. Protecting that strength will require attention to the businesses caught directly in these tariffs, including some that may rarely appear in the headlines.
For them, the trade dispute is no longer theoretical. It arrived on Saturday.
