Vermont Businesses Feel the Impact of Tariff Rhetoric

As the political landscape shifts with President Donald Trump’s tariff rhetoric against Canada gaining momentum, Vermont’s small businesses are already feeling the repercussions. The state, known for its close ties with its northern neighbor, is witnessing the effects of trade tensions firsthand, particularly in the spirits and tourism industries.

One notable example is Caledonia Spirits, based in Montpelier, where Ryan Christiansen serves as president and head distiller. A recent shipment intended for the Société des alcools du Québec (SAQ), which oversees the trade of alcoholic beverages in Quebec, has been stalled at the Barr Hill distillery for nearly a month. Following Trump’s announcement of tariffs against Canada in February, the SAQ canceled the order, leaving Christiansen and his team in a difficult position. “Customers are ready to buy, and we are in the peak of slow season,” he explained. “Now, it’s sitting on the dock. We missed our financial plan in February because of this.”

The economic ties between Vermont and Canada are significant, with the Green Mountain State exporting approximately $680 million in goods annually to Canada, while importing over $2.6 billion. This interconnectedness means that small businesses like Caledonia Spirits are particularly vulnerable to changes in trade policies. The tariffs, which began with a 25% levy on goods from both Mexico and Canada, have prompted retaliatory actions from Canada, including the withdrawal of American alcohol products from Ontario shelves. Despite a temporary reprieve granted by Trump on certain goods covered by the USMCA until April 2, many products remain subject to duties, leaving businesses in limbo.

Christiansen expressed concern about the long-term implications of the tariffs on relationships with Canadian customers. “How do I get them to buy as much as the Canadian customer wanted to buy? Even if the tariffs go away, I think it’s overly optimistic that this order gets resubmitted,” he said, highlighting the precarious position of businesses reliant on cross-border trade.

The impact of tariff discussions extends beyond the spirits industry, reaching into the tourism sector as well. Steve Wright, president and general manager of Jay Peak Resort, located just ten miles from the Canadian border, reported a noticeable decline in spending from Canadian tourists during critical periods. The weeks of March 3 to March 8 and March 10, which coincide with school breaks in Quebec and Ontario, typically see a surge in Canadian visitors, who make up nearly half of the resort’s market. This year, however, spending has softened, raising concerns about the financial health of local businesses that depend heavily on this influx of visitors.

As Vermont grapples with the fallout from tariff rhetoric, the resilience of its small businesses will be put to the test. The hope remains that diplomatic solutions may arise, allowing businesses like Caledonia Spirits and Jay Peak Resort to recover from the current challenges and continue to thrive in a landscape shaped by international trade.