The Queenston-Lewiston bridge spanning the Niagara River officially makes NOTL an international border town. Our commerce is highly influenced by cross-border traffic and import-export haulage volumes.
U.S. President Donald Trump, with his focus on trade and tariff negotiations, poses significant threats to our town’s economy. Local businesses must adapt quickly to protect profits and jobs.
Let’s review recent trade developments and the resulting economic reactions, highlighting tourism and the wine industry.
The new U.S. tariffs rely on presidential authority but lack congressional support. Constitutionally, wielding this exclusive executive power requires an emergency. President Trump claims the purported flow of fentanyl from Canada southbound as the justification, despite actual seizures by the U.S. border patrol being minuscule.
Analysts suggest Trump’s real goal is to increase revenues through tariff collection, reducing the U.S. budgetary deficits to rein in spiralling public debt. The U.S. is one of the few developed economies without a national sales tax, like the HST. But tariffs will impose hidden sales taxes on American consumers, as importers embed their extra costs in prices.
Trump initially proposed a 25 per cent duty on most Canadian imports, with a reduced 10 per cent rate on energy and potash. Fifty per cent levies were later imposed on steel and aluminum. At the Alberta G7 summit in June, a deadline for a new trade deal was set for July 21.
More recently, Trump threatened a 35 per cent tariff rate on non-USMCA (or CUSMA) compliant goods if negotiations fail, starting Aug. 1. This contrasts with his proposed 30 per cent rate on goods from the EU, China and Mexico.
According to a recent Ipsos poll, three-quarters of Canadians intend to forgo travel to the United States, while 72 per cent will avoid buying U.S.-made goods. Statistics Canada’s June transborder travel numbers document the trade war’s toll. The number of U.S.-resident automobile trips to Canada declined by 10.4 per cent from 2024 — the fifth consecutive monthly decrease.
Meanwhile, car visits to Canada are down 10 per cent and the number of Canadian resident return trips by automobile from the U.S. also fell by 33 per cent year over year.
A World Travel & Tourism Council study from May forecasts the U.S. will be the only country to sustain spending declines from international travellers in 2025, projecting a $12.5-billion loss. On a net basis, more Canadians opting to vacation locally are offsetting declines in inbound American visitors.
American wine flowing into Canada has reduced dramatically, due to retail bans on U.S. alcohol, including at the LCBO. In April, Canada imported just $2.9 million of American wine, a decline of 94 per cent from a monthly average of $49 million last year. Canada posted a wine trade surplus with the U.S. for the first time in history, potentially benefitting local wineries and grape growers.
Meanwhile, our southern neighbours are also reacting.
Buffalo launched a new promotional campaign, “Buffalo Loves Canada,” unveiling a billboard on the QEW near Toronto, lighting up areas in their downtown maple leaf red and giving away gift cards.
We will undoubtedly see more changes emerge as the cross-border trade situation continues to evolve.
In his Bay Street career, Steve McGuinness was a senior adviser to large financial institutions and is now retired in NOTL. Send your personal financial planning questions to him at smcgfinplan@gmail.com.
