Tariff Changes Threaten Montreal Retailers Amid Cross-Border Tensions

Changes to U.S. shipping tariffs are significantly impacting Canadian retailers, particularly in Quebec. The recent decision by the Trump administration to eliminate the de minimis exemption, which previously allowed U.S. customers to order goods valued under US$800 from Canada without incurring tariffs, has left many small businesses grappling with uncertainty.

One such retailer is Yasmine Wasfy, owner of Boutique Lustre in Montreal’s Plateau-Mont-Royal borough. She opened her store in 2006 and has navigated various challenges, including the rise of online shopping and the recent pandemic. Now, she faces a new obstacle in the form of fluctuating cross-border regulations that affect her American clientele, which constitutes approximately 15 percent of her customer base.

“It’s been tough to cater to our American clients,” Wasfy explained. “The changes have stressed them out, and we can’t guarantee anything from when they place an order to when it’s sent out.” The unpredictability of tariffs has created a volatile environment, likening the situation to a “rollercoaster.”

Potential Business Closures Loom

The implications of these tariff changes extend beyond just individual retailers. According to the Canadian Federation of Independent Business (CFIB), up to one-third of small businesses in Canada could be affected. CFIB’s director of national affairs, Christina Santini, noted that businesses risk having products returned or incurring additional duties if proper forms and codes are not submitted. This adds an additional layer of complexity to cross-border transactions.

“Businesses risk losing sales and market share in the states as they adjust,” Santini told CTV News. The U.S. is reportedly focusing on the resale market, targeting products imported from China into Canada for eventual sale in the U.S. market.

At Boutique Lustre, the impact of these tariff changes is already evident. Wasfy cited an example where a $200 garment could incur an additional $40 charge due to the new tariffs. “It’s never fun to have to upsell or make people spend more money. Nobody likes to spend money on shipping or tariffs, but it’s out of our control at this point,” she lamented.

Call for Government Support

The CFIB warns that the current climate could lead to one in five businesses facing closure within the next six months due to these tariff changes. The organization is calling on the Canadian government to provide support to affected businesses.

Despite the challenges, Wasfy remains grateful for her primary customer base, which consists of 85 percent Canadian consumers. She emphasizes the importance of local support as her business navigates this turbulent period.

As the situation evolves, the effects of these tariff changes will continue to reverberate through the Canadian retail landscape, prompting concerns about the long-term viability of small businesses like Boutique Lustre.