Ottawa's retaliatory tariffs a 'punch in the gut' to gluten-free bakery

The owner of a specialized bakery in Winnipeg issurprisedatthe extentOttawa's retaliatory tariffs on the United States willhamstring her business.

Betsy Hiebert, who owns CocoabeansBakeshop and CafeonCorydonAvenue, was dismayedto receive a letter last week from her American supplierlisting 50 of the brands she buys slapped with a 10 per cent tariff, which came into effect on Canada Day.

She didn't expect so many of her products to be affected by Canada'scounter-measures to the tariffs the Trumpadministration imposed on Canadiansteel and aluminum.

"It felt like a little bit of a punch in the gut, to be honest," said Hiebert, who requires specificingredientsto bakedairy- and gluten-free goods for her customers.

"Ittook me for surprise because a lot of the ingredientsthat we use, by nature, are very expensive becauseit's not something we grow in Canada and so we have to import them," she said, citing a high exchange rate as another blow to business.

"It just feels like we're never going to win."

No substitute

As a specialized baker with sometimes a singlesource for certainingredients, Hiebert says they cannot shop around.

And as a small business, they cannotdemand lower prices like a big-box store would.

"We're really atthe mercy of whatever our wholesalers or distributors decide our price should be."

Her ingredients subject tothe new tariffs include soy sauce, Worcestershire sauce, flour blend and various dressings and sauces.

Other businesses won't be immediately impacted at least, not yet, explained Manitoba Chambers of Commerce president Chuck Davidson.

He expects most retailers dealing with the tariffsto eat some of the additional costs early on, Davidson told CBC Manitoba's Information Radio on Monday.

"If you got increased costs from a business perspective in terms of bringing these goods in, it gets passed down to consumers eventually."

He expects the escalating trade disputeto have a snowball effectresulting in bad news for both countries, since their economies are sointertwined.

"Can we expect more retaliatory measures from the U.S. now that we've done this? We probably can."

The trading relationship matters to Manitoba. The province exportednearly $9billion worth of U.S. goods in 2017, while importing $16.6billion, according to provincial statistics.

Davidson thinks the counter-measures were a necessary response, but he hopes a deal is reached shortly.

Until then, he said the trade tiff will only erode consumer confidence.

"It does create a continued level of uncertainty in terms of what that relationship with the U.S. is, and [with them] being our biggest trading partnerthat's not a road we really want to go down."

At Cocoabeans, Hiebertmade an "emergency order" last week to restock her shelves before the new tariffs wereimposed. She hopes the additional stock will last her allsummer.

After that, she intends to absorb the additional costs if the measures remain in place, but she'll have to watch her costs like never before.

"We'll have to sort of wait and see how this tariff warpans out."