As the CEO of a Canadian e-bike company that has grown through both smooth rides and bumpy trails, I’ve learned that no business journey is without its share of challenges. However, the recent announcement from the U.S. administration—imposing a 25% tariff on all Canadian goods (with energy products facing a 10% tariff)—marks a significant turning point for companies like mine that rely on cross-border trade.
While many hoped this day wouldn’t come, as of February 4, these tariffs are officially in place. Canada has responded with countermeasures, signaling the start of what could become a prolonged trade dispute. But as with any major shift in the economic landscape, while some will face obstacles, others will find new opportunities.
The Immediate Impact on Canadian Businesses
For Canadian manufacturers and exporters, the consequences are immediate and tangible. Higher tariffs mean increased costs, which will likely be passed down through supply chains, affecting both businesses and consumers. Products that were once competitively priced in the U.S. will now face a cost disadvantage, potentially leading to declining sales and tightened profit margins.
The Canadian dollar has already felt the effects, sliding to around C$1 = US$0.68, with more downward pressure expected as demand for Canadian goods decreases. A weaker loonie means higher prices for imported goods, directly affecting Canadian consumers’ purchasing power. If the currency drops further, even by 5%, it’s equivalent to a 5% rise in costs for anything we import—from electronics to raw materials.
In response, Canada has introduced retaliatory tariffs on $30 billion worth of U.S. goods, with plans to expand this to an additional $125 billion in a few weeks. The goal is to pressure the U.S. to reconsider, but given America’s economic size and relative self-sufficiency, the road to resolution might not be swift.
Biktrix’s Approach: Sharing the Burden to Protect Canadian Jobs
At Biktrix, we’ve had to make some tough decisions in light of these new tariffs. To mitigate the impact of lost sales and maintain the health of our business, we’ve decided to absorb half of the 25% tariff cost instead of passing the full amount onto our U.S. customers.
Why? Because if we were to transfer the entire tariff burden to our customers, it would significantly increase our prices in the U.S. market, likely causing sales to drop. When sales decline, it’s not just our bottom line that suffers—it’s Canadian jobs that are put at risk. Fewer sales mean less demand for production, shipping, customer support, and more, all of which could lead to job cuts.
At the end of the day, we are a Canadian company, and we believe in doing what’s best for our people. By sharing the tariff burden with our customers, we aim to keep our products competitive, maintain sales volumes, and, most importantly, protect the livelihoods of our Canadian employees.
This isn’t an easy decision, but it’s the right one for our team, our customers, and our community.
Winners in the Midst of the Trade Turmoil
While the focus has largely been on the negative impact of these tariffs, it’s important to acknowledge that not every business will lose. In fact, some companies—particularly those in the U.S.—could find themselves in a more favorable position than before.
Take, for example, industries like e-bikes, motorcycles, RVs, and recreational products. Many U.S. companies have struggled to clear out excess inventory, often finding it hard to compete with the lower prices of imported goods from Canada and other countries. Now, with Canadian products hit by a hefty 25% tariff, these American businesses suddenly have a competitive edge.
Imagine a U.S. retailer sitting on last season’s e-bike models. A few weeks ago, they may have been forced to offer deep discounts to compete with Canadian imports. But today, without changing a thing, their prices are more attractive simply because the competition has become more expensive. This creates an unexpected window of opportunity for American companies to move old inventory and regain lost market share—without having to innovate, cut costs, or adjust their business models.
In essence, the tariffs act as an economic reset button for certain U.S. industries, leveling the playing field in their favor, at least temporarily.
What Lies Ahead
The big question is: how long will this new reality last?
Trade disputes have a way of resolving themselves once both sides feel enough economic pain to return to the negotiating table. We saw this with the U.S.-Canada tariff tensions in 2018, which were resolved relatively quickly after industries on both sides of the border began to suffer. However, if this dispute drags on, the ripple effects could become more severe, potentially leading to job losses, slower economic growth, and even the risk of a recession in Canada.
For Canadian businesses, this may accelerate efforts to diversify export markets beyond the U.S., invest in domestic supply chains, and reduce dependency on cross-border trade. Meanwhile, American companies benefiting from reduced foreign competition will need to act fast—because this advantage may disappear just as quickly as it arrived.
A Final Thought
While these new tariffs pose undeniable challenges for Canadian companies like Biktrix, they also highlight the resilience and adaptability that define entrepreneurs on both sides of the border. In times of uncertainty, businesses that pivot quickly, spot new opportunities, and remain flexible are often the ones that come out stronger.
If you’re a Canadian business owner worried about the future, remember that adversity often sparks innovation. And if you’re an American company with inventory gathering dust in a warehouse, this might just be your moment to turn that around.
The road ahead may be rough—but like any good ride, it’s all about how you handle the bumps along the way.
