N.L. businesses put focus on protecting customers amid Canada

N.L. businesses put focus on protecting customers amid Canada-U.S. trade war

'We're all just trudging through all of this uncertainty and volatility right now,' one business operator says

Businesses ‘trudging through all of this uncertainty’ as trade war escalates

Recent developments in the Canada-U.S. trade war have left Canadian businesses grappling with the different types of fallout, from retaliatory tariffs to outright import bans.

After trade talks with the U.S. failed last month, various Canadian exports were hit with a 50 per cent tariff, prompting Canada to retaliate with dollar-for-dollar tariffs on American imported goods. This includes a 50 per cent tariff on gas-powered motorcycles with engines larger than 800cc, a move that heavily impacts Harley-Davidson models.

"My first reaction was, 'Here we go again,'" said Sean LeFresne, general manager of Mount Pearl's Rugged Rock Harley-Davidson, the only dealership for the brand in the province.

"If you recall back three years ago, we were hit with a tariff as well. And we were very fortunate back then that Harley-Davidson, the motor company, they ate all the tariffs and they didn't pass any of that on to the customers," LeFresne adds, noting that the company will do what they can to support customers.

Trump's ban on Canadian imports

Following Canada's retaliatory tariffs, U.S. President Donald Trump responded by banning the import of Canadian alcohol and some other goods.

Steve Ciccolini is the president of Iceberg Vodka, a one-of-a-kind spirits brand made of 20,000-year-old icebergs off the coast of Newfoundland. The company was founded in the province back in 1995.

While Iceberg Vodka is currently distributed across 12 states, the brand is now caught up in Trump's sweeping import ban.

"There's a lot more discussions and emails flying back and forth with sometimes more questions than answers. And we're all just trudging through all of this uncertainty and volatility right now," said Ciccolini.

This uncertainty has been putting pressure on the company as the trade war intensified over the past years. Ciccolini says they are effectively managing a "day-by-day and hour-by-hour" situation that requires constant adjustment.

"We've been dealing with sort of the threat of tariffs ever since. We've sort of changed our game plan accordingly," said Ciccolini. "To say we're into plan B, C and D would be an understatement."

While Trump's import ban shuts out a significant market for Iceberg Vodka, Ciccolini says they remain committed to keeping production steady.

The company is actively looking to pivot towards alternative international markets while expanding its sales volume within Canada.

N.L. businesses looking elsewhere as retaliatory tariffs kick in on U.S. goods

Trump banning import of Canadian booze, motorcycles, other goods into U.S.

"I'm currently traveling across the country to meet with our liquor board partners to ensure that our position in the liquor boards is solidified," said Ciccolini. "And our commitment is to keep that production flowing because we're looking for new markets to sell our product and we're doubling our efforts locally."

He adds that they are 'banking' on Canadian consumers to offset this revenue loss.

"We're hoping that the Canadian consumer will step up and support local products — Canadian made, Canadian-owned products."

Impacts of Canada's counter-tariff

As for dealerships like Rugged Rock Harley-Davidson, the escalating trade tensions are keeping them in an uncertainty similar to other affected businesses.

However, general manager LaFresne says they're in a more fortunate situation.

"Our inventory currently in our store right now is not tariffed and it's still at the original pricing," he said.

"We're probably not going to receive any more motorcycles for the rest of this year. So we're hoping we're going to dodge a bullet," LeFresne added, noting the U.S. midterm elections might ultimately change the direction of the trade war.

But in the chance that the 50 per cent tariff ever hits their products, LeFresne says it would be "impossible" to pass that along to customers.

"I don't want to think about what a price of a motorcycle could go off to with a 50 per cent tariff," said LeFresne. "Anytime that there's a big increase like that to any price, it's hard to pass that along to the customer. So us, as a local dealer and a motor company, we do what we can to support the customer."

LeFresne acknowledges how detrimental absorbing the costs of tariffs could be. But like Ciccolini, he remains optimistic that the local community will step up to support local businesses.

"They're not supporting us as an American [product seller], they're supporting us as a Newfoundland business," said LeFresne.

Meanwhile, Ciccolini says that the prices of Iceberg Vodka products will remain unchanged, hoping for more support from Canadian consumers as the company's future becomes less and less predictable.

"We have a solid loyal base that I hope will keep supporting us, keep supporting a great Canadian brand," said Ciccolini. "And we will adjust, and react, and plan accordingly, even though the horizon is much less predictable than it ever has been."

Max Baco is a journalist working CBC News based in St. John's.