Trump's New Tariffs Could Kill Canadian Small Businesses Before You Know What Hit
How Canada's Digital Tax Fight With Trump Will Cost Your Business Thousands
Photo by Towfiqu barbhuiya on Unsplash
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**Black Gen Xers. No fluff. Just signals.**
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Breaking News:
Two countries play chicken with their economies; small business owners clean up the mess.
Trump’s abrupt move to end trade talks over the digital tax isn’t just theatre; it could squeeze thousands of Canadian entrepreneurs. The president called Canada’s new levy “egregious” and threatened fresh tariffs within days. Meanwhile, Canadian small businesses wonder if survival now depends on Silicon Valley earnings and Trump’s moods.
The timing couldn’t be worse for entrepreneurs balancing rising costs and shrinking profits.
What Canada’s Digital Services Tax Means for Trade
Cut through the noise: here’s what’s happening.
Canada’s Digital Services Tax is a 3% levy on tech giants with global revenues exceeding $820 million and Canadian revenues over $14.7 million. The tax applies to digital services revenue above $20 million annually, and payments are retroactive to 2022, creating roughly a $2 billion bill for companies like Google, Facebook, and Apple. The first payments were due Monday, June 30, 2025.
[Canada's Digital Services Tax explained - Government of Canada]
This isn’t about your local web developer; it’s about making tech giants pay, but Trump calls it a declaration of war.
Trump’s 25% Tariff Threat and Canada’s Measured Response
The president doesn’t do subtle; this time’s no exception.
Trump threatened a 25% tariff across all Canadian exports, with higher rates for some products. He claimed Canada is “a very difficult Country to TRADE with” and accused it of slapping 400% tariffs on U.S. dairy. Ottawa answered cautiously, saying they need to “give Team Canada space to navigate.”
[Prime Minister's office responds to Trump's threats - National Post]
When elephants fight, the grass gets trampled; small businesses are the grass.
How Higher Costs Will Hit Canadian SMEs and Exporters
Here’s where it hits Canadian entrepreneurs.
A 25% tariff on exports would slam small manufacturers, importers, and anyone selling into the U.S. Companies relying on U.S. steel, aluminum, or auto parts would see costs spike overnight. The digital tax will raise costs for businesses running digital loyalty programs, from travel points to gas rewards.
Small businesses can’t absorb massive cost hikes; they pass them on or fold.
Smart Moves Canadian Small Businesses Can Make Now
Stop hoping politicians will save you; start saving yourself.
Diversify beyond the U.S. - hard, but essential. Lock in supply contracts before tariffs hit; hedge currency risk if rates swing. Explore e-commerce to reach Europe, Asia, and markets less prone to Trump’s trade tantrums.
The best defense is a business model that doesn’t hinge on one country’s mood.
Why This Trade Fight Won’t End Well for Entrepreneurs
Trade disputes grab headlines; small businesses pay the price.
The Canada-U.S. relationship has come under historic strain since Trump took office, and there’s no sign it’s getting better. While politicians posture and tech giants write checks, Canadian entrepreneurs calculate if they can stay open. The digital tax fight is the latest excuse for a trade war that was inevitable.
Planning can soften the blow - even when politics turn as wild as a drunk chef with a flamethrower.
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