News Summary

Canadian tech startups are grappling with significant economic uncertainty following the United States’ decision to escalate its trade war by increasing tariffs and altering import rules. The US has hiked tariffs on Canadian goods from 25 to 35 percent for items not covered under the CUSMA agreement and removed the de minimis exemption, which allowed goods under $800 to be imported duty-free. This move has created logistical and financial challenges for Canadian businesses, especially startups that sell directly to US consumers or rely on US supply chains. Kyle Feigenbaum, CEO of Healthybud, highlighted the potential impact on small companies, noting that a 35 percent margin decrease could be catastrophic. MycoFutures and Paperplane Therapeutics are among the companies grappling with these changes. The uncertainty surrounding trade negotiations has been compared to the COVID-19 pandemic’s impact on businesses, with calls for the Canadian government to reinvest funds from reciprocal tariffs into the economy. The ongoing situation has already led to Smart Nora, a sleep tech startup, filing for bankruptcy.