Canada’s tariffs are coming for Michigan — and it’s not just auto plants that will feel the pain

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“Like when you grab a rope and sort of lift up on it, you can watch it travel down the rope. And so I think it sort of travels through the supply chain that way in terms of where the cost is,” Beardslee explained, using the rope imagery to liken how the duty is paid at entry and then moves through the importer, wholesaler, retailer, and then, often, to the consumer.

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Canadian importers would pay the duty when covered U.S. goods enter Canada. They could absorb the cost, pass it along to wholesalers, retailers, and consumers, demand price concessions from U.S. suppliers, or replace those suppliers, depending on contracts and market dynamics.

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Businesses were already grappling with thin margins and uncertainty caused by shifting U.S. trade policy. Tariff changes have caused a whiplash effect for everyone involved in trade this past year — from importers and retailers to consumers and customs officials. It’s been hard to keep up, but not knowing the tariff levels from one week to the next makes business planning incredibly difficult.

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“The cost associated with tariffs was bad enough, but the inconsistency with which they were applied made it so hard to guess what to do,” said Beardslee. “What they’re looking for more than anything is some more consistency and certainty.”

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Beardslee pointed out that grocery margins are already just two to three per cent and that 73 per cent of respondents to a Michigan Retailers Association member survey reported that tariffs have already “had a negative or strong negative impact” on them since April 2025.

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Further duties mean wholesalers could be “squeezed dramatically,” Anderson said, on contracts already signed. Smaller distributors, meanwhile, have “much less room to manoeuvre” and less influence to seek exemptions.

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The uncertainty also makes it hard for businesses to react to everything that’s happening, stymying both positive and negative planning decisions.

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“Expansion plans get put on hold when uncertainty is high,” said Miller. “But believe it or not, layoff plans also get put on hold when uncertainty is high.

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“I think especially for companies in Maine, in Michigan, in Wisconsin, northern Minnesota, where there’s a lot of cross-border business involved, what you’re going to have right now is a freezing of decisions.”

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Given the time of year, Beardslee pointed to tariff volatility impacting retailers and distributors of back-to-school products as an example. Prices are already up on common school items, such as shoes, pencils, crayons, binders, and folders, he said, comparing tariff collections and effective tariff rates from March through June of this year to 2025.

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“Those kinds of products are one area where you’d expect to see more (price increases),” he said. “Our retailers are trying to source things months in advance, so when that effective tariff rate is changing constantly, it could very well be that when an order is placed that there was no effective tariff rate on it, but by the time it arrives, there is.”

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Anderson agreed and noted that there is a bigger risk to long-term trade between Michigan and Canada.

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Some retailers, he said, “may just decide it’s too much trouble to stock them when they can get cheaper goods from China and Vietnam.”

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Owing to the negative tenor of trade politics between the two countries, not to mention the unhelpful renaming of Lake Ontario, distributors and retailers may already be looking for new suppliers, he said.

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“Unfortunately, raising the rhetorical temperature… makes business people start thinking really hard about finding other places to get their goods,” said Anderson.

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“So unfortunately, some of the damage here is already done.”

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National Post

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