Impact of 25% U.S. Tariffs on Atlantic Canada & New Brunswick

The announcement that the U.S. will proceed with 25% tariffs on Canadian and Mexican imports will have significant economic consequences for Atlantic Canada, and particularly for New Brunswick. Premier Susan Holt has acknowledged that these tariffs could cost the province between 4,000 and 6,000 jobs, highlighting the severity of the situation.

Key Implications for Atlantic Canada & New Brunswick:

1. Trade Disruption: New Brunswick's economy is heavily dependent on exports to the U.S., particularly in forestry, fisheries, agriculture, and manufacturing.

2. Job Losses: Major employers in the forestry sector (pulp and paper mills), seafood processing, and food manufacturing will be hit hard, leading to plant closures and layoffs.

3. Rising Costs for Consumers: Tariffs will make New Brunswick's exports more expensive in the U.S. market, reducing competitiveness and demand.

4. Supply Chain Disruptions: Industries reliant on cross-border trade, such as trucking, logistics, and warehousing, will experience delays and cost increases.

5. Investment Uncertainty: Businesses may delay or cancel expansion plans due to the increased costs of doing business with the U.S.

Portfolio offers the following strategic roadmap for consideration moving forward

Immediate & Short-Term Actions (Next 30 Days)

1. Government-Led Negotiations:

   • The provincial and federal governments must continue to engage with U.S. officials to seek exemptions or alternative trade solutions.

   • Our provincial governments must pressure the Canadian government to introduce countermeasures, tax incentives, or relief funds to cushion the impact on affected industries.

2. Business Contingency Planning:

   • Companies should reassess supply chains to find alternative markets or suppliers.

   • Develop pricing and operational strategies to mitigate tariff impacts, such as adjusting product pricing, seeking cost efficiencies, and increasing productivity.

3. Municipal & Regional Response:

   • Economic development agencies should collaborate with businesses to identify new export opportunitiesoutside of the U.S. (Europe, Asia, domestic markets).

   • Municipalities must support affected workers through workforce transition programs.

Medium-Term Actions (3-12 Months)

1. Market Diversification:

   • Target new markets (EU, UK, Asia) under existing trade agreements like CETA (EU) and CPTPP (Pacific nations).

   • Invest in branding initiatives to promote New Brunswick's products in other parts of Canada.

2. Support for Affected Workers:

   • Retraining & Upskilling programs for displaced workers.

   • Employment transition services to connect workers to new opportunities in growing industries.

3. Strategic Industry Support:

   • Federal & provincial grants/subsidies for industries most affected (forestry, seafood, manufacturing).

   • Investment in automation and efficiency improvements to offset rising costs.

Long-Term Actions (12-24 Months & Beyond)

1. Infrastructure & Policy Investments:

   • Strengthen trade infrastructure (ports, rail, airports) to support exports to non-U.S. markets.

   • Establish permanent relief policies for industries affected by unpredictable trade barriers.

2. Enhancing Local Supply Chains:

   • Reduce dependency on U.S. markets by building stronger interprovincial trade agreements.

The 25% U.S. tariffs pose a significant economic challenge for New Brunswick and Atlantic Canada, but proactive strategy, strong partnerships, and rapid execution will determine how well businesses and governments weather this crisis.

Key Questions

To navigate this crisis effectively, businesses, industry groups, and governments should be asking the following questions:

Trade & Market Strategy

• How exposed is our business to U.S. tariffs, and what is our contingency plan?

• What alternative markets should we target for exports?

• Can we pivot our supply chain to reduce reliance on the U.S.?

Financial & Operational Resilience

• What financial support or relief programs are available to help our industry?

• How can we optimize production costs to offset tariff-related expenses?

• Should we explore joint ventures or partnerships with Canadian companies to maintain competitiveness?

Government & Advocacy

• How can we engage with policymakers to advocate for tariff relief?

• What counter-tariff measures or trade agreements might benefit our industry?

• What role can municipal and provincial governments play in economic stabilization?

Workforce & Employment

• How do we retain skilled workers during a downturn?

• What reskilling programs should we offer to employees in high-risk sectors?

• Are there opportunities for redeployment within the organization or in adjacent industries?

How Portfolio Can Help

Portfolio can play a crucial role in helping businesses and governments navigate this trade crisis through:

1. Strategic Response Framework (ReThink):

   • Refocus: Identify the biggest risks and opportunities in light of the tariffs.

   • Reimagine: Develop new revenue models, cost-saving strategies, and alternative markets.

   • Redesign: Optimize supply chains, operations, and pricing strategies.

   • Reinvigorate: Align teams and stakeholders on how to execute recovery plans effectively.

   • Reinforce: Ensure ongoing monitoring, KPI tracking, and course corrections.

2. Leaders On Demand & Support On Demand:

   • Provide fractional executives (COO, CFO, trade strategists) to help businesses pivot.

   • Project management and implementation support to execute trade diversification, workforce transition, and funding strategies.

3. Government Relations & Policy Advocacy:

   • Assist businesses and industry associations in lobbying for exemptions, relief packages, or countermeasures.

   • Work with municipal and provincial governments to implement local economic resilience initiatives.

Reach out today at www.weareportfolio.com