The new U.S. tariffs create significant financial burdens for Canadian businesses of small and medium size even though major corporations and oil producers have managed to obtain exemptions. StarField Optics based in Toronto lost all its U.S. sales after President Donald Trump implemented a 25% tariff in March on goods which did not meet U.S.-Mexico-Canada Agreement content requirements.
The 35% tariff increase forced StarField Optics founder Steve Mallia to restructure his production because most of his components originated from China. The company invested six months of lost sales and significant supply chain expenses to meet USMCA requirements so it could regain access to its 60% U.S. market.
The USMCA agreement protects most Canadian businesses from Trump’s trade policies but numerous smaller companies encounter comparable difficulties. The Canadian economy depends on small and medium-sized businesses because they represent 98% of all firms and generate more than half of the country’s GDP. The investment paid off for Mallia because he expects U.S. sales to return in October despite the current financial loss.
