Canadian grocery stores are sidelining US products — and American businesses are feeling the pinch

• Canadian customers are telling US businesses they will stop buying US products.
• Grocery chains in Canada are sidelining American products and expecting their sales to drop.
• The boycott, in addition to retaliatory tariffs, could have an impact on the US agricultural industry.

Canadian businesses large and small have been turning down American products, starting with non-essentials like alcohol, and spreading toward a wider variety of food products that economic experts say could hit different levels of the agriculture supply chain.

"Basically, overnight, everything changed, maybe irreparably," said Alisa Gorokhova, a resident of Quebec, as she recalled the morning after the tariff announcements came for the first time. "There's suddenly 'made in Canada' labels on things and American booze is gone from the shelves."

Gorokhova said she now sees shoppers actively checking where everything is made, taking the task of boycotting US products seriously.

The increasing animosity Canadians are showing toward American products comes after Trump repeatedly imposed and paused a 25% tariff on Canadian exports, and most recently slapped a 25% tax on Canadian steel and aluminum. Trump also talks often about his desire to make Canada the 51st state of the US and called Justin Trudeau, Canada's now-former prime minister, the "governor."

As a result, American businesses are feeling the pinch. Ethan Frisch, CEO and founder of Burlap & Barrel, a public benefit corporation based in New York that specializes in fairly sourced single origin spices, said that he has been receiving emails from Canadian customers he had a long relationship with saying they will no longer purchase his products because of the boycott.

"We're not really sure how to handle this," said Frisch. "We as individuals at Burlap & Barrel did not vote to put Trump in office and we do import some spices from Canada as well, so our supply chain is very intertwined with the whole tariff situation."

"All this could force us to buy less from our partners by introducing an extra level of risk, which really contradicts our mission of putting more money into the pockets of smaller farmers," he added.

Large grocery chains across Canada are also spotlighting local products in response to patriotic sentiments.

Take Sobeys Inc., Canada's second-largest national food retailer with approximately 1,600 stores across ten provinces. A spokesperson of its parent company, Empire Company Limited, told Business Insider that over the past year, around 12% of their sales came from products sourced in the US, but given their work to "find alternatives to US sources over the past 30 days, that number is expected to decrease."

Metro Inc. with around 1,000 grocery stores in Quebec, Ontario, and New Brunswick, as well as Longo's, a family-owned grocery chain mainly operating across the Greater Toronto Area, both said they have rolled out an in-store program to label individual products with more salient Canadian identification. Local products are also being promoted on their websites and newsletters.

The latest available data from the International Trade Administration shows that Canada is still the largest destination for US exports of high-value agricultural products.

Downstream effects

Economic and policy experts have told Business Insider that depending on the size of the target and the length of the boycott, the agriculture sector in the US could suffer, especially under the current push to cut back on federal spending.

"This is going to hurt the industries here, there's no doubt about it," said Larry Gerston, professor of public policy civic engagement at San Jose State University. "Whether it will hurt more than a counter tariff, that depends on if they can focus on a targeted set of products, how serious they are about it, and how much the Canadian government supports the boycott."

"As I see it, the Canadians are a very proud people, and they are very offended this time," said Gerston.

Trump's current tariff on China and the expected counter-tariffs could also intensify the pain on top of boycotts by Canadians.

Jerry Nickelsburg, professor of economics at the UCLA Anderson School of Management, said that farmers received government subsidies during Trump's first term when they suffered from retaliatory tariffs from China, but they "should not expect that they'll receive a subsidy this time" under the new directive to cut government spending.

"We can expect that demands for US agriculture products would decline not only from Canada, but also from China," said Nickelsburg. "And if you have soft demand, that means this is going to impact both the price and farmers' income."