Trump's trade conflict stirs awareness among many consumers, questioning their future purchasing choices towards Canadian goods.

Trump's trade conflict stirs awareness among many consumers, questioning their future purchasing choices towards Canadian goods.

In a surprising turn of events, increased tariffs on Canadian goods by the U.S. have led to a significant change in consumer behaviour and the economy.

The tariffs, which have resulted in higher prices for affected products, have caused consumers to rethink their spending habits. Many are either reducing purchases, switching to cheaper alternatives, or becoming more price-sensitive. This trend is particularly noticeable in categories like clothing, textiles, food, and motor vehicles, where tariff-driven price increases are most notable.

For instance, tariff hikes have led to a significant increase in the prices of leather products and apparel, with costs rising by up to 40% in the short run. Food prices have also seen a modest increase, influencing shopping habits with many consumers either switching brands or buying less.

The combination of tariff-driven cost increases and economic uncertainty has made consumers more cautious, especially during pivotal shopping seasons like back-to-school. This cautiousness has led to a shift in spending allocation.

However, not all Canadian exports are affected by these tariffs. Most will remain tariff-free due to the CUSMA/USMCA exemption. This exemption could potentially lessen the overall impact of the tariffs on the Canadian economy.

The trade war has also sparked a 'Buy Canadian' movement, extending beyond goods to travel. Canadians are seeking alternative destinations, and a growing number of them are avoiding travel to the U.S. An Ipsos poll released ahead of Canada Day found that around three-quarters of Canadians surveyed intend to avoid travel to the U.S., up 10 points since February.

The 'Buy Canadian' movement has had a positive impact on small businesses across the country. Dan Kelly, president of the Canadian Federation of Independent Business (CFIB), encourages consumers to visit local independent businesses to support the country. He states that purchasing from small local companies benefits the country more than buying from big U.S.-based chain stores.

However, the uncertainty caused by the tariff hikes is taking a toll on Canada's small businesses. Without immediate support, many may be forced to scale back operations. The lack of resolution means small firms will not be able to plan for the future or continue to put off difficult choices.

As the trade war continues, the question remains as to how long it will last and whether things will return to normal once it ends. Until then, the 'Buy Canadian' sentiment has been rekindled with a new wave of tariffs against Canadians, making Canada more focused on being self-sufficient.

References:

1. [Source 1]
2. [Source 2]
3. [Source not provided]
4. [Source 1] and [Source 2]
5. [Source not provided]
6. [Source not provided]
7. [Source 8]
8. [Source 9]
9. [Source 10]
10. [Source 11]
11. [Source 12]
12. [Source 13]
13. [Source 14]
14. [Source 15]

In the wake of the tariffs, consumers are becoming more sensitive to price changes, particularly in categories such as sports equipment, which have prominent tariff-driven price increases, given their role as leisure activities and the association with maintaining a healthy lifestyle.

Meanwhile, the 'Buy Canadian' movement has seen a boost, extending not only to goods but also services like travel. This shift in consumer behavior could have a positive impact on local sports businesses, particularly independent stores, encouraging consumers to support national businesses over their American counterparts.

Read also: