Cornwall businesses contend with fractured cross-border ties

One day into the Trump administration's sweeping 25 per cent tariffs on Canadian goods, the border city of Cornwall, Ont., is bracing for the costly impact on local businesses that depend on American ties.

According to the Cornwall & Area Chamber of Commerce, one in three businesses in Cornwall has a direct trade relationship with the U.S. For Columbia Finishing Mills, a company that converts and distributes book coverings, exports to the U.S. make up roughly 15 to 20 per cent of its revenue.

"I think a lot of people are nervous right now," said Matthieu Plourde, sales manager for the company. "It's putting us in a position where we're having to re-strategize. Not having all the information and all the details does make it a little tricky. We're not always 100 per cent sure to what degree this will affect us, but on the same note, we are nervous."

Plourde said some impacts have been immediate, such as having to find reliable new suppliers to replace U.S. mills they've partnered with for several decades, as well as ways to service existing American customers. A less obvious challenge, he said, is keeping staff morale high.

"We're quite resilient. We've endured a lot of recessions. Another round of tariffs also, that far predate my time here," Plourde said. "We were able to survive that just fine."

Slippery business

Meanwhile, Cornwall-based Ground Soap is slipping some relief to its American customers. Owner Angela Youngs said the family-owned soap manufacturer is extending a 25 per cent discount to U.S. buyers for two weeks to counteract the tariffs.

"Those customers are really important to us," said Youngs. "It's quite a bit of our sales, and so as long as we can do that, we'll try and take care of them."

Youngs wasn't sure the tariffs would ever actually happen, given how often U.S. President Donald Trump has delayed them so far.

When she woke up to the new reality on Tuesday, it was "a little bit of a bummer," she said. Between the cost of the discount and the need to find new suppliers, the squeeze could cost the company thousands of dollars.

"I think as Canadians, we try and stay optimistic, but it's gonna be painful for a bit," Youngs added. 

The one silver lining could be the trend toward buying Canadian on this side of the border.

"It's a little bit tricky, but I think we're managing and I'm excited for new Canadian customers," said Youngs. "Now we just make the best of it."

Trade war 'really unnecessary'

Ross Butterworth of the Cornwall & Area Chamber of Commerce said businesses across the city are trying to find ways to soften the impact of tariffs.

"A lot of members are looking at how this is going to impact their bottom line," he said. "Their mitigation strategies are with staffing, changing suppliers, finding new markets to sell to and also postponing capital expenditures."

In his view, the impact of tariffs won't be limited to companies that do direct business with the U.S. There will be ripple effects across the city's economy.

"Broadly, I think what you'll see is you're going to see reduction of staff, you're going to see some rise in unemployment," he said. "Even with businesses that don't necessarily sell into or directly import from the United States, they're going to be second- and third-hand impacted.... Everyone from top to bottom is going to feel the squeeze."

Cornwall Mayor Justin Towndale said the city is looking at ways to support local businesses by easing the regulatory burden or by favouring Canadian business through municipal procurement.

"I'm concerned," said Towndale. "We're talking about hundreds of jobs, millions in our local economy."

He's also been meeting with municipal leaders from New York State, and has more meetings planned. He has a simple point to make.

"I think it's unfortunate it's come to this point," said Towndale. "This trade war is really unnecessary, and it just doesn't make any sense. There's no reason for this. Our economies are intertwined, and that is a very beneficial relationship. But this sort of thing has the potential to damage both our economies and hurt our people in both countries."