Vermont Businesses Under Attack! Are Trump's Tariffs Destroying the US-Canada Relationship?

A Spot of Gin convenience!

Ah the intricate dance of global economics! Here in Vermont a rather unfortunate scenario is unfolding a tale of tariffs and tipples. It appears the pronouncements of President Trump regarding tariffs on our friends to the north are already stirring the pot and not in a good way. A shipment of rather fine spirits from Barr Hill by Caledonia Spirits is currently languishing on a dock in Montpelier. Imagine an entire consignment of exquisite gin gathering dust instead of delighting discerning palates in Quebec! It seems the Société des alcools du Québec those responsible for the province's alcoholic beverages have put the brakes on their order faster than a startled chameleon. As the President of Caledonia Spirits Mr. Ryan Christiansen said himself 'To have this hit our business in the slow month of February? We missed our financial plan in February because of this.' A gin uine tragedy indeed!

The Maple Leaf's Shadow

Vermont shares a rather special bond with Canada a neighbor and trading partner of significant importance. As it stands the Green Mountain State exports a staggering $680 million in goods to Canada each year. However Vermont imports more than $2.6 billion in goods from Canada each year with electricity and fuel oil among the top imported goods. But this delicate ecosystem of cross border commerce is now under threat. The imposition of tariffs has cast a shadow of uncertainty and small businesses in Vermont are already feeling the chill a 'whisper of discontent' as I once observed in the remote rainforests of Borneo.

Retaliatory Measures: A Vicious Cycle

Remember in the grand tapestry of nature every action has a reaction a principle that holds true in the complex world of international trade. Trump's initial tariffs triggered retaliatory levies from then Canadian Prime Minister Justin Trudeau and even Ontario threatened to pull American alcohol products from its shelves. It's a classic case of tit for tat a game of economic brinkmanship that could have far reaching consequences. Whilst there was a 'reprieve' on Canadian and Mexican goods covered by the North American trade agreement USMCA this was only temporary many products are still subject to the duties. As Mr. Christiansen poignantly noted 'Even if the tariffs go away I think it's overly optimistic that this order gets resubmitted.'

Ski Slopes and Softening Sales

The impact extends beyond distilleries. Just a stone's throw from the Canadian border Jay Peak Resort is already witnessing the effects of the tariff talk. Spending from Canadian tourists is showing signs of softening particularly during key weeks like Quebec and Ontario break weeks. Canadian visitors typically account for half of the resort's market but the day market has seen a significant drop as articulated by Jay Peak Resort President and General Manager Mr. Steve Wright. 'The Quebec break week sold really well and we had great conditions but what was missing was the day market'. It appears that even the allure of pristine ski slopes cannot overcome the chilling effect of economic uncertainty. After all as I've often said 'No one will protect what they don't care about and no one will care about what they have never experienced'. Perhaps a little Canadian hospitality might be in order?

A Loonie for Your Thoughts?

The enterprising minds in Montpelier are already brainstorming ways to keep the Canadian tourists coming. Bill Butler co owner of Artisans Hand Craft Gallery is proposing "Canada Days," offering deals and freebies to our northern neighbors. 'We'd have a deal for Canadians who want to come down have a little tour of the city and go from place to place and get a free beer or coffee'. A proactive approach indeed a commendable effort to nurture a valuable relationship! It seems a lot of businesses 'are absorbing the problem' but not Mr. Butler.

The Price of Peat Moss!

Even the humble peat moss is not immune to the tariff tempest. Sam Guy owner of Guy's Farm & Yard is concerned about rising prices for imported goods from Canada including wood shavings wood pellets peat moss and animal feed. A 25% tariff on these essential products would inevitably be passed on to consumers. 'We can't eat this,' says Mr. Guy. 'We're going to pass on the tariff. We're not going to add a margin or anything like that but a lot of these are low margin products.' It is a stark reminder that even the most mundane aspects of our lives are intricately connected to the global economic web. And as I've often pondered 'Are we a plague on the Earth?' Let us hope that this particular plague of tariffs can be resolved before it causes lasting damage to this vital relationship!