'There's a lot of uncertainty': Some Toronto businesses anxious about Trump's tariff threat

Looking to expand into the U.S., Dani Kagan says she's concerned that incoming president Donald Trump's threat of a 25 per cent tariff on Canadian goods could stifle growth for local businesses.

“The idea that a tariff could come is honestly pretty devastating,” the Toronto-based businesswoman said.

Kagan is the co-founder of Mave & Chez, a company that makes high-end slippers designed to provide ergonomic support.

While taking a tour of her Toronto warehouse, Kagan says that she got the idea, she says, “When I couldn't find a supportive slipper that was also genuinely stylish and elegant, I started making them myself.”

Mave & Chez started in 2021 and has been growing steadily ever since. Their slippers are manufactured in Brazil and shipped to Canada for distribution. Most orders come direct to the company website which has allowed Mave & Chez to keep pricing consistent at around $200 a pair. They also take pride in offering free shipping in Canada and the U.S. So far, about 15 per cent of their orders are from south of the border.

Recently, the company began focusing more on the United States. Kagan says, “In the last six months or so, we've been starting to really push our U.S. customer base.”

However, political change in Washington means a lack of predictability for international trade.

“There's a lot of uncertainty with the tariff and what it actually means for us,” she said.

Trump has threatened to impose a 25 per cent tariff on all Canadian and Mexican goods unless both governments address what he's described as the flow of illegal migrants and drugs across their borders.

Many Canadian businesses, like Mave & Chez, that had been looking at expanding into the United States are now shifting their strategy. Cato Pastoll is the CEO of Loop, a cross-border banking platform that helps businesses grow outside Canada, and believes that trade between Canada and the United States will continue, despite the possibility of tariffs.

“If we look over the next 5 to 10 years, we strongly believe that cross-border trade and sales into the U.S. is only going to grow,” he said.

Pastoll points to the fact that more than half of all products Canadians buy come from the United States and more than 30 states list Canada as their number one trading partner for both imports and exports.

“These numbers are just fundamentally too big to disappear overnight,” he added.

For now, Pastoll said that he is advising clients not to rely solely on the U.S. for growth in the short term, while considering expansion to places like Europe. It’s a strategy shift that Kagan is looking at because Mave & Chez could lose some short-term competitiveness in their U.S. expansion if the tariffs materialize.

Kagan says, “I don't think it's going to stop us from selling in the U.S., but I do think it's going to force a lot of small businesses like Mave & Chez to think about increasing pricing.”

Still they remain hopeful that a diplomatic solution will prevent tariffs and allow businesses to continue their expansion.