Vermont companies that depend heavily on trade and tourism with Canada are confronting another round of uncertainty as renewed tariffs between Washington and Ottawa threaten to increase costs, cancel orders and further damage commercial relationships that have already weakened during the past year.
Business owners gathered Tuesday at Jay Peak Resort, only about five miles south of the Canadian border, for a discussion organized by U.S. Sen. Peter Welch of Vermont. Their message was consistent: after seeing tentative signs that cross-border business might finally be improving, the latest escalation in the U.S.-Canada trade dispute has forced many companies to reconsider their plans once again.
Mike Desmarais, owner and chief executive of Newport-based snow-grooming equipment dealer Track Inc., said his company is preparing to deliver three new machines to Canadian customers during September.
Each machine currently costs approximately 500,000 Canadian dollars.
Two of those vehicles were manufactured in the United States, making them potentially subject to Canada’s latest retaliatory tariffs. If the applicable 50% duty takes effect, the added cost could reach roughly CA$250,000 for each vehicle.
For a relatively small equipment dealer, Desmarais said a sudden increase of that size leaves few practical options. His company has operations not only in Vermont but also in Wisconsin and Quebec, making the cross-border relationship central to its business model.
He said orders that had begun recovering have recently stalled again as customers wait to see what the new tariffs will mean for final prices.
Canada’s government has announced that a new package of retaliatory tariffs will take effect September 8.
Ottawa says the countermeasures are a direct response to the United States imposing tariffs of as much as 50% on approximately $27.6 billion worth of Canadian goods.
Canada plans to match the U.S. measures dollar for dollar, with individual products facing tariffs of 15%, 25% or 50%, depending on the corresponding American rate.
The counter-tariffs cover $27.6 billion worth of U.S. imports and concentrate heavily on sectors including steel, dairy products, appliances, agricultural equipment, pulp and paper, plastics and electronics.
The latest confrontation comes after months of increasingly strained trade negotiations between the neighboring countries.
Canadian officials say negotiations were conducted intensively but broke down after Washington sought concessions Ottawa considered economically unacceptable and damaging to Canadian workers, businesses and strategic industries.
The Canadian government subsequently suspended the negotiations rather than accept the proposed terms and announced its retaliatory measures.
For northern Vermont, the consequences extend well beyond companies importing or exporting manufactured products.
Tourism businesses have already experienced a substantial decline in Canadian customers following the deterioration of relations between the two countries.
Steve Wright, president of Jay Peak Resort, said Canadian visitors normally account for approximately half of the resort’s customers.
During the 2025-26 ski season, however, Jay Peak reported a roughly 35% decline in visitors crossing the border from Canada.
Wright said the reaction among Canadians has also changed.
When tariffs were introduced during the previous year, many customers appeared disappointed, confused or surprised by the direction of the U.S.-Canada relationship. The latest round has produced more outright anger, making it significantly harder for businesses to persuade Canadian customers to return.
That represents a particularly serious problem for companies located near the border, where Canadian visitors have traditionally been treated as part of the normal regional economy rather than as a separate international customer base.
Greensboro cheesemaker Jasper Hill Farm has experienced similar difficulties.
Co-founder Mateo Kehler said 2025 was the worst year in the company’s history.
Jasper Hill had been rapidly expanding its Canadian business before political and economic relations deteriorated, but that growth abruptly stopped.
Recently, the company received what appeared to be encouraging news when a Canadian importer placed an order for the coming holiday season.
Kehler saw the order as evidence that the Canadian market might finally be recovering.
The optimism did not last.
After President Donald Trump announced the latest tariff measures, the importer canceled the order.
Jasper Hill is also being affected on the import side of the trade relationship.
The company has been modernizing its manufacturing operations at the Vermont Food Venture Center in Hardwick and has purchased specialized cheesemaking machinery from Canada.
Kehler said some of that equipment has been hit with tariffs reaching 50%, creating severe pressure on the company’s finances.
Before the latest escalation, Jasper Hill ordered another piece of equipment intended to automate one of the more labor-intensive parts of its cheesemaking process.
The machine has not yet crossed the border.
Instead, the company has left it in Canada because management cannot confidently determine what the final tariff-adjusted cost will be when it enters the United States.
Kehler said that uncertainty makes ordinary financial planning extremely difficult. A company can budget around a known tariff, even if the cost is painful, but constantly changing trade rules make it harder to know whether major capital investments will remain financially viable by the time equipment is delivered.
The situation is particularly consequential for Vermont because Canada is far more important to the state’s economy than it is to many other parts of the United States.
Welch’s office estimates that roughly one in four Vermont businesses relies in some way on trade with Canada.
In 2024, Canada accounted for approximately 35% of Vermont’s exports, 67% of its imports and 56% of the state’s total international trade.
Vermont purchased more goods from Canada than from its next nine-largest foreign markets combined.
Food and agricultural exports from Vermont to Canada alone totaled approximately $181 million during 2024.
The new tariffs also arrive after the legal foundation of Trump’s earlier trade measures suffered a major setback.
In February, the U.S. Supreme Court ruled 6-3 against tariffs the administration had imposed using the International Emergency Economic Powers Act.
The ruling eliminated one of the legal mechanisms Trump had used to pursue his broader tariff agenda.
The administration subsequently turned to a different and much older law.
The latest Canadian tariffs rely in part on Section 338 of the Tariff Act of 1930, a provision from the Smoot-Hawley era that allows the president under specified circumstances to impose additional duties of up to 50% when another country is determined to discriminate against U.S. commerce.
The White House has argued that Canadian policies affecting American trade justify use of the provision.
Administration proclamations targeting Canadian products have explicitly cited Section 338 and established additional duties reaching 50% on selected imports.
Welch is now attempting to eliminate that authority.
He joined New York Sen. Kirsten Gillibrand and Illinois Rep. Brad Schneider in introducing the Banning Antiquated Duties and Delivering Equitable American Levies Act, shortened to the BAD DEAL Act.
The legislation would repeal Section 338 of the Tariff Act of 1930.
It would also require the government to refund duties already collected under that authority.
Welch has argued that decisions carrying such enormous economic consequences should not rest solely with the president and that Congress needs to reassert its constitutional authority over trade policy.
The Vermont senator has also supported other proposals intended to restrict presidential tariff powers.
Among them is the bipartisan Trade Review Act, which seeks a larger congressional role in future trade actions.
Welch has additionally backed the CANADA Act, a proposal that would exempt qualifying U.S.-owned small businesses from certain tariffs imposed on Canadian goods.
But Welch acknowledged that the BAD DEAL Act faces steep political obstacles.
Republicans currently control both chambers of Congress, and although some Republican senators have become increasingly critical of portions of Trump’s trade strategy, opposition to the president’s tariff policies remains substantially weaker among Republicans in the House.
That leaves little immediate indication that legislation fully repealing the administration’s Section 338 authority could pass Congress.
Welch nevertheless argued that lawmakers ultimately have a responsibility to protect businesses and residents in the states and districts they represent, even when doing so requires breaking with their own party’s president.
Desmarais said he appreciates the legislative effort but believes a larger political change may ultimately be necessary.
He said companies such as his cannot indefinitely absorb enormous tariff increases or operate while constantly changing trade rules make it impossible to tell customers what equipment will eventually cost.
Without a reversal in policy, he questioned whether Track Inc. can continue operating successfully from Vermont, Wisconsin and Quebec.
His warning was severe: if the current tariff structure remains in place, he believes the company could eventually be forced to close.
The broader U.S.-Canada dispute is meanwhile showing little sign of easing.
Canadian Prime Minister Mark Carney said Tuesday that Washington would need to take a more serious and respectful approach before formal negotiations could meaningfully restart.
Carney said Canada remains open to a mutually beneficial agreement but would not accept terms that undermine major Canadian industries or the country’s economic sovereignty.
Canada is also committing billions of dollars to cushion the economic impact.
Alongside its retaliatory tariffs, Ottawa announced a new $7.5 billion package aimed at helping workers and businesses affected by U.S. trade measures.
That assistance builds on nearly $25 billion in support the government says it has already provided since the trade dispute intensified.
Among the new measures is an additional $1.5 billion for a regional initiative intended to help small and medium-sized companies cope with tariff-related financial pressure.
For Vermont businesses, however, government assistance cannot fully replace the cross-border customers and supply relationships developed over decades.
A ski resort cannot easily replace thousands of Canadian visitors overnight.
A cheesemaker that has cultivated Canadian distributors cannot instantly create an equivalent market elsewhere.
And a Vermont equipment company facing an additional quarter-million Canadian dollars in duties on a single vehicle may have no realistic way to absorb that expense without losing the sale.
That is why the uncertainty itself has become nearly as important as the tariffs.
Companies need to know the price of machinery before ordering it, the final cost of products before quoting customers and the rules governing trade before making multiyear investment decisions.
The renewed confrontation has made each of those calculations significantly harder.
Only months after some Vermont businesses believed the worst disruption in U.S.-Canada commerce might be ending, the latest round of tariffs has forced them back into the same defensive posture.
Canada’s retaliatory measures are scheduled to begin September 8.
Unless Washington and Ottawa find a new route toward negotiations, businesses on both sides of the border are preparing for another period of higher costs, weaker trade and growing uncertainty over a relationship that has traditionally been among the closest commercial partnerships in the world.