Even given the pauses, the rollbacks, the exemptions and the “truce,” President Trump’s trade war is changing how consumers and businesses behave. And not just in the U.S.
As global supply chains have shifted in response to the tariffs, some foreign companies have experienced major upheaval while others have gotten a boost.
One business that seems to be on the winning side of this trade war is Launchpad Co-Pack in Collingwood, Ontario, north of Toronto on the shore of Lake Huron. The company does bottling and canning for both alcoholic and non-alcoholic beverages.
Before the trade war, it mostly supported niche brands — organic teas, craft liquor, fruit juices in fancy glass bottles. But now?
“We've been reached out to by companies of all sizes, including multinational brands,” said CEO Scott Morrison.
Just about every square meter of the 40,000-square-foot facility that isn’t taken up by equipment is piled high with pallets of juices and sodas and liquors.
Morrison said U.S. companies have been coming to him with basically the same story:
“Saying, ‘Well, we've been considering moving our Canadian … production out of the U.S.,’ but before it was just a secondary or tertiary item on their list,” he said. “And now they're saying, ‘Well, clearly we should be considering this.’”
All of the new business has made some Launchpad employees happy because they’ve been working — and getting paid for — more hours.
“Yeah, I haven't had a day off in over two weeks now,” said Launchpad’s chief facility officer Brad Mear. “We had to bring in this new equipment, and we've had tours and new clients, and so it's been busy.”
Giving one of those client tours during my visit was Chris Morrison, the firm’s chief operations officer and brother of CEO Scott Morrison.
He said even with the influx of new business, the trade war has clearly had negative effects on Launchpad Co-Pack as well. Many of their customers are scared.
“They've either had increases in their raw material costs, uncertainty about potential increases in the raw material costs and downstream impacts of their profitability,” he said.
And that’s the case more broadly throughout Ontario’s economy. A few companies may see a boost, but a lot of sectors are already hurting.
“The U.S. is Ontario's most important trading partner, accounting for 77% of the province's international goods exports, and 60% of its services exports,” said Jeffrey Novak, the financial accountability officer for the Legislative Assembly of Ontario.
He and his team crunched the numbers on how the tariffs — at least as they stood in mid-April — would impact the region.
They found that if the tariffs on both sides of the border were to continue, the area would enter into a “modest recession” later this year.
GDP growth in the region would slow to less than half of what it would be without tariffs, and Novak said there would be anywhere from 69,000 to 190,000 fewer jobs in the province by next year.
And that potential economic harm is eliciting another kind of reaction here in Ontario, said Launchpad Co-Pack CEO Scott Morrison.
“Everybody's been so hurt on an emotional level by feeling the betrayal of this whole thing,” he said.
That is also driving more business his way, Morrison said, from companies all over Canada that used to bottle and can their products in the Chicago area or elsewhere in the U.S. All of the new business could end up doubling or even tripling the production his company did last year.
Morrison just upgraded equipment that will increase the plant’s production capacity and he said he’s thinking about hiring more people to help with the work.
Because once his clients have shifted their supply chains, “I don't think they're going to revert back ever again. I think this has now changed the landscape,” he said.
Morrison said he’s asked several of his new clients if they’ll stick with him even if the tariffs go away.
And they’re telling him, given the economic uncertainty south of the border, production in Canada is now part of their long-term strategy.
