From rolled steel to kitchen cabinets, Canadian businesses hit by targeted U.S. tariffs are struggling to respond as the trade war drags into its second year. 

While most exports continue to flow tariff-free under the U.S.-Mexico-Canada trade agreement, industries like metal production, lumber, and automobiles continue to face steep duties more than a year after President Donald Trump upended the global status quo. Companies have cut staff, pulled back on production, and pushed for government action as the heavy duties continue to shake the trade relationship with the U.S. 

Take Daniel Drapeau, CEO of Quebec-based custom cabinet maker Miralis. His company has invested $43 million since 2022 as it built two plants, with plenty of automation to boost productivity, but like so many others in the industry, it’s now operating well below capacity.

The problem, like with other sectors hit by the Section 232 tariffs, is not only the loss of the U.S. market, but that all the other countries blocked from the world’s largest economy are also looking for buyers, leading many to try and sell more into Canada. 

Overall, it has been the auto parts sector among the hardest hit. Statistics Canada reported there were 64,828 autoworkers employed on the parts side as of December, down 9.5% from a year earlier.

The drop is despite manufacturing employment as a whole growing slightly last year, showing how specific sectors are bearing the brunt, said Claire Fan, senior economist at RBC.

“Because of the way that these tariffs are imposed. . . five to six key manufacturing subsectors are really, really hurting versus the rest of the economy.”

And some have been hurting for a while. The softwood lumber industry was hit by harsh duties back in 2017, which Trump has since added to, resulting in production down over 25% since the first round, she noted.

The result is 22 mills closed since 2022 and another 50 with reduced operations. 

While production and job cuts are some of the most obvious impacts, the uncertainty around trade will also mean less investment. The uncertainty is also leading to fewer orders in the near-term.

While kitchen cabinets didn’t get hit by doubled tariffs, the potential alone creates its own problem.

“We’re still under this threat of adding 50%,” said Drapeau. “I believe that the Americans are seeing this as a risk, to order from Canada, because of this possible increase.”

He said that while there have already been impacts, worse could be yet to come.

“Hundreds of jobs have been lost, and thousands are in work-share, and there will be more unfortunately in the next months or years if we can’t find solutions.”