How Canadians are preparing for the fallout from Trump’s trade war

Toronto, Canada – At a grocery store in downtown Toronto, small red maple leaves dot the aisles next to food prices.

They’re easy to miss, but shoppers like Mateus Gujrel are on the lookout. It’s a quick sign that something is made in Canada, an increasingly important factor for consumers like Gujrel as the trade war with the United States heats up.

Gujrel, a software developer, is part of a wave of nationalism happening in Canada. Since US President Donald Trump returned to power last year, relations between the two countries have been strained amid a wave of US tariffs.

Because of the tensions, Gujrel is “much more conscious” about buying locally produced food, he said. He switched brands of almond milk and stopped buying LaCroix, replacing American soda with a Canadian alternative.

“We will take anything that we can clearly see is Canadian,” Gujrel told Al Jazeera outside the No Frills grocery store on Wednesday.

Over the past year, such purchases have become increasingly common in Canada. Trump’s tariffs, as well as his repeated comments about making Canada the “51st state,” are fueling a movement to boycott American goods and spend money closer to home.

“I don’t want … our money going to the U.S. in any way that I can avoid,” Gujrel said.

There are no signs that the feelings are fading. Margaret Chapman, chief operating officer of research firm Narrative Research, said her firm has been tracking Canadians’ attitudes toward buying domestic goods for about a year and a half.

“The initiative of Canadians to buy Canadian products and support Canadians is not a passing feeling,” Chapman told Al Jazeera. “It’s very strong, it’s ongoing and it’s likely to last a long time.”

However, a new escalation in the trade war could further complicate this commitment. Experts warn that consumer prices could rise and job losses are possible.

The trade war is already at a critical stage. Tensions between the U.S. and Canada escalated in late August after negotiations failed to prevent Trump from imposing 50 percent tariffs on nearly $20 billion of Canadian products, including cars, textiles and hockey sticks.

Canadian Prime Minister Mark Carney later accused the US of inserting last-minute demands into the negotiations, including terms that were “uneconomical, unfair and undermining the net benefits to Canada.”

The US tariffs took effect on August 22. In response, Canada on Tuesday imposed a new round of retaliatory tariffs ranging from 15 to 50 percent on roughly $20 billion of U.S. imports.

Carney explained that the measures were a dollar-for-dollar response targeting American products, from steel and aluminum to dairy products, appliances, clothing and cosmetics.

When will Canadians feel the impact of tariffs?

For now, many buyers interviewed by Al Jazeera said they had not noticed any sharp price increases. Economists say this is not surprising.

Consulting firm Oxford Economics estimates that the new tariffs will directly affect only 0.25 per cent of the average consumer basket, largely because many of the goods Canada is targeting are used by businesses rather than purchased directly by consumers.

However, over time, some costs may still pass through to consumers indirectly. For example, although relatively few prepared foods are directly affected, there are tariffs on materials used to package them, including metal cans, glass containers and plastic films.

This means that although the food itself is not subject to tariffs, it may still become more expensive.

Retail analyst Bruce Winder said many stores are still selling items purchased before the tariffs took effect, so price increases may not be felt immediately.

“I think you’ll probably see some price increases on the shelves over the next few weeks,” he said.

For now, most of the direct financial burden is expected to fall on businesses. Oxford Economics estimates businesses will bear at least half the cost of the new counter-tariffs, while households will bear about 20 percent through higher prices.

But Winder said retailers can only absorb so much volume, especially if tariffs of 25 or 50 percent remain in place.

And for many Canadians, the uncertainty surrounding the trade war may matter as much as what happens to prices.

“I think a big part of it is the fear, the worry, the anxiety that this creates,” Winder said. “While the tariffs may not hit your wallet as hard as you might argue, I think people are a little nervous right now about the potential impact on employment.”

Can Canadians afford to continue buying Canadian products?

All this is happening because Canadians are already feeling squeezed.

Mida Buzzeri, who works in finance, said she intentionally tried to buy Canadian products and avoided American products where she could. For her, that means, in part, resisting Trump.

“Canada is a great economy and a great economy, and we are not just another U.S. state,” she said.

But she admits that choosing a Canadian may be more difficult if you have to pay significantly more to do so.

“There comes a point where it’s like, ‘OK, this is getting extreme,’” Buzzeri said. “The prices of my products are getting too high.”

However, for now, research shows that the movement to buy Canadian products is strong.

One study by Narrative Research found that 76 percent of respondents chose a hypothetical basket of all-Canadian products costing C$120, or $86.50, over a cheaper basket, likely made in the U.S., costing C$100, or $72.

Even when the Canadian basket cost C$140 (about $101), 70 percent of respondents still chose it.

“People said they would do it, and they are doing it,” Chapman said. “Even in tough economic times… people are willing to put more of their dollars in if it supports Canada.”

Gujrel is among them. He said he would have paid more for the Canadian product, although if it cost twice as much he might reconsider his decision.

Experts say this could be the real test of consumer commitment to the trend: not whether Canadians want to support domestic businesses, but how much more they can afford to do so.