Toronto Businesses on Edge as U.S. Tariffs Spark Economic Turbulence

Toronto’s business community is bracing for economic shockwaves as newly imposed U.S. tariffs threaten to drive up costs, destabilize supply chains, and trigger potential job losses across the city.
A new city-led survey reveals that 75% of Toronto businesses expect a spike in operational costs due to shifting U.S. economic policies, while nearly half fear major disruptions that could ripple through every industry — from construction to manufacturing to food services.
“We know business owners and workers are anxious,” said Mayor Olivia Chow. “Toronto’s economy is tightly woven into the North American market, and when policies change south of the border, we feel it here almost instantly.”
With over half of Toronto businesses depending on U.S. imports — including raw materials, construction goods, and machinery — and more than a third exporting to the States, the city’s economic exposure is significant. Alarmingly, about one-third of surveyed businesses indicated they may have to reduce staffing levels if pressures intensify.
To address the rising uncertainty, city officials have launched a 10-point “Economic Action Plan” focused on bolstering local resilience. The plan encourages initiatives like buying local and reshoring supply chains. Already, 36% of businesses have shifted to Canadian suppliers, while 31% have paused hiring in anticipation of more turbulence.
“It’s slow shopping now — people are checking labels, choosing local,” said Deputy Mayor Mike Colle. “But these small shifts can’t bear the whole burden.”
City councillors are calling for deeper, structural reforms. Councillor Alejandro Bravo, chair of the economic development committee, emphasized the urgent need to preserve Toronto’s “employment lands” — areas zoned for industrial and commercial use — to prevent further erosion of the city’s job base.
“We’re already 2.5% below target on employment lands,” Bravo warned. “If we lose more, we risk dismantling Toronto’s job belt.”
City Hall is also exploring innovative tools like artificial intelligence to support business growth and productivity. However, councillors acknowledge that the city’s power to counter international economic forces is limited.
“Municipalities have the fewest levers to pull,” said Councillor Josh Matlow. “But what we can do is make it crystal clear to the provincial and federal governments: Toronto’s businesses need help — and they need it now.”
As international trade tensions simmer and economic policy remains unpredictable, officials say building long-term resilience is not just a strategy — it’s a necessity for Toronto’s future.