Key points 

• While the recent U.S. tariffs will have a moderate aggregate impact on Canada at the macro level, acute impacts will be felt by the small to medium-sized exporters (SMEs) that are directly affected.
• In Alberta, manufacturing is the main sector impacted by U.S. tariffs—specifically chemicals, plastics, machinery, and electrical equipment. 
• Almost all of Alberta's manufacturing exporters impacted by the latest U.S. tariffs are SMEs. 

On August 22, the U.S. imposed a 50% tariff on roughly $28 billion worth of Canadian goods. Canada responded with plans to impose tariffs ranging from 15% to 50% on an equivalent $28 billion worth of U.S. imports.

The Canadian counter-tariffs span over 600 individual products, including steel and aluminum, dairy, honey, appliances, and pulp and paper. 

As we recently noted, the aggregate impact may look relatively manageable, but that can mask the much larger effects on individual businesses caught in the tariff net.

Today’s Twenty-Four is focused on the more micro impacts of U.S. tariffs with respect to small and medium-sized exporters (SMEs) by looking at the key sectors impacted and the concentration of SMEs in those sectors.

For some small exporters, those pockets of exposure could be significant. According to a recent CFIB survey, among small exporters selling tariff-affected goods, 77% expect revenues to decline while 35% expect revenues to fall by at least half. Nearly eight in ten said a 50% tariff would make their products uncompetitive in the U.S. market.

Are you feeling the squeeze? We want to hear from Alberta’s SMEs. If you run a small or medium-sized business, take our quick survey with ATB’s Entrepreneurial Growth Team to share how your business is navigating tariffs, supply chain shifts, and economic uncertainty to help inform our next Quarterly Small Business Pulse.

Same tariff, less room to maneuver

Being small does not automatically make a business more exposed to tariffs. However, larger firms tend to have more options: they can spread costs, shift production, negotiate with suppliers, or absorb lower margins. Small firms tend to have less runway.

The cash-flow pressure faced by smaller exporters helps explain why tariffs can be a threat to certain businesses. BDC estimates that about 5,500 Canadian small and medium-sized enterprises (SMEs) exporting to the U.S. could be directly affected by the latest measures.

What is the exposure of Alberta SMEs?

Alberta is highly tied to the U.S. market. In 2025, 88% of the province’s goods exports went to the U.S., and almost 90% of Alberta’s exporting establishments sold goods to the U.S. Statistics Canada’s Trade by Exporter Characteristics data shows that SMEs (under 500 employees) also make up the vast majority of Alberta’s exporting base, accounting for 98.6% of exporters and 81.2% of export value.

As we’ve previously shown, Alberta’s direct exposure to the latest tariffs is much smaller than that of other provinces. A key reason is that energy, by far Alberta’s largest export to the U.S., is not on the list of products subject to the new Section 338 duties. We estimate that $1.5 billion—or roughly 1% of Alberta’s U.S.-bound exports—falls within the newly targeted products.

Estimating how much of this overall exposure falls on SMEs is not directly observable, but we can use a couple of data sources to develop an estimate. First, we estimate that 97% of tariff-affected exports in Alberta are concentrated in the manufacturing sector—particularly chemical, plastics, machinery, and electrical equipment. Second, we know, based on national  data on export characteristics, that 98% of manufacturing exporters are SMEs, accounting for about 44% of manufacturing export value.

Applying that national share to Alberta’s tariff-exposed manufacturing exports we estimate a potential SME exposure of $600-700 million in Alberta.*

The takeaway is that while Alberta’s total tariff exposure might seem manageable at a macro level, much of the burden falls heavily on smaller manufacturing businesses. Other tariff-hit industries, such as agriculture, are similarly dominated by small and medium-sized exporters.

Small businesses across Alberta whose products appear on that list will have to face the sizable impact of up to a 50% tariff potentially making their products uncompetitive in U.S. markets and introducing supply chain disruptions. 

*Public data does not show Alberta exports by product and firm size, so we approximated based on national exporter-characteristics data.

Answer to the previous trivia question: Saskatchewan was the other province created on September 1, 1905, alongside Alberta.

Today’s trivia question: How many K-12 students are there in Alberta?