How Will Tariffs Affect Manitobans and Indigenous-owned Businesses?

After a brief pause to last month’s tariffs, the United States has once again announced a broad 25% tariff on Canadian goods and services, with an exception of 10% for Canadian oil imports. Analysts warn that these tariffs could have profound consequences for all economies involved.

According to one study by the Peterson Institue for International Economics (PIIE), Canada’s yearly output could contract by as much as $100 billion. The Bank of Canada similarly forecasts an inflationary future should American tariffs remain in place, with the potential for recession in the ensuing year. Canadian officials, including the Manitoba Premier, have announced retaliatory measures to protect Canadian industry.  

Tariffs are a tax on goods and services paid for by the importer –– consumers and businesses –– which, in effect, raises the cost of said goods and services. Manitoba’s economy is particularly vulnerable to U.S. tariffs due to its strong reliance on exports. In 2024, up to 70% of Manitoba’s exports went to the United States. The province’s key industries such as agriculture, manufacturing, and natural resources, are all heavily tied to cross-border trade. A 25% tariff means Manitoban goods will become significantly more expensive for American buyers, reducing demand and cutting into local businesses' revenue. 

Agriculture, a pillar of Manitoba’s economy, is expected to be among the hardest-hit sectors. The province exports large quantities of wheat, pork, and canola to the U.S. If these products face higher costs at the border, farmers may struggle with declining sales and lower commodity prices. In response, some may have to scale back production or seek alternative markets, which can be costly and uncertain. Similarly, Manitoba’s manufacturing sector, which produces machinery and transportation equipment, will face declining competitiveness in U.S. markets. 

Indigenous-owned businesses in Manitoba, many of which operate in trade-dependent sectors, will also feel the pressure of these tariffs. Many Indigenous entrepreneurs are involved in agriculture, fisheries, and resource extraction, all industries that will see reduced export demand due to higher costs. Additionally, businesses that rely on imported equipment or raw materials from the U.S. will face increased costs, cutting into their already tight profit margins. 

For Indigenous communities that rely on business revenues to fund social programs, infrastructure, and employment opportunities, these economic disruptions could have vast long-term consequences. Limited access to capital and financing also makes it harder for Indigenous entrepreneurs to weather economic downturns compared to larger corporations. 

With the tariffs in place, Manitoban businesses may need to seek alternative markets, adjust supply chains, or push for government relief measures. The federal and provincial governments may step in with subsidies or tax breaks to ease the burden, but these measures take time and are not guaranteed to fully offset losses. Indigenous-owned businesses, in particular, may require targeted support to remain competitive in an increasingly challenging economic environment. 

For Manitobans, these tariffs will likely mean higher prices for goods and potential job losses in affected industries. Should the trade dispute continue, Manitoba’s economy could experience prolonged uncertainty, making diversification and resilience key priorities for businesses moving forward.