For years, selling handmade Canadian products to American customers offered small businesses access to a market far larger than their own. Now, the escalating Canada-U.S. trade dispute is turning that advantage into a serious financial vulnerability.
Natasha Lawyer, who operates Sugarhouse Ceramic Co. in Kentville, Nova Scotia, says American buyers once represented 80% of her customers. Her business previously generated thousands of dollars in monthly U.S. sales, but that revenue has collapsed as tariffs and cross-border trade complications discourage purchases.
Lawyer has taken a second job to help make ends meet, illustrating how quickly international trade policies can affect independent business owners.
Her experience reflects a broader challenge facing Canadian exporters. As Washington imposes new restrictions and Ottawa responds with countermeasures, businesses that spent years building American customer relationships are confronting shrinking sales, higher operating costs and an increasingly uncertain financial future.
A Nova Scotia Pottery Business Built Around American Customers
Natasha Lawyer’s business began with a passion for handmade ceramics rather than international trade. Together with her partner, Brett, she developed Sugarhouse Ceramic Co., creating distinctive pottery, mugs, hand-carved paint palettes and other products inspired by life in Atlantic Canada. Their business eventually settled in downtown Kentville, Nova Scotia, where the pair operate a pottery studio and offer workshops. Over time, online sales helped the company reach customers far beyond its local community, especially in the United States.
That American customer base became essential to the company’s success. In an October 6 interview reported by CBC News, Lawyer explained that roughly 80% of her customers had previously been American. The business had built dependable demand across the border, allowing its products to reach consumers who might never visit Nova Scotia. However, the same customer concentration that supported the studio’s growth has become a significant vulnerability. When American trade policies changed, the company had few immediate alternatives capable of replacing such a large portion of its customer base.
Monthly U.S. Sales Collapse From Thousands of Dollars to Just $300
The scale of the downturn is particularly striking. According to Lawyer, approximately two years ago Sugarhouse Ceramic Co. generated between US$4,000 and US$5,000 every month from American customers. By September 2026, that figure had fallen to just US$300. Compared with the earlier monthly range, the latest amount represents a decline of more than 90%. For a business dependent on online purchases and repeat customers, such a sharp reduction can create serious difficulties covering ordinary operating expenses.
The deterioration did not happen all at once. Lawyer told CBC Radio’s Mainstreet Nova Scotia that sales were essentially cut in half during 2025, following the introduction of U.S. tariffs on Canadian goods. The situation subsequently worsened as further trade restrictions disrupted cross-border transactions. She described the experience as overwhelming, emphasizing how dramatically conditions had changed. Although the business has not publicly disclosed audited profit figures, its reported revenue collapse helps explain the intense financial pressure. Even when sales decline, expenses associated with production, workspace, materials and maintaining an online storefront do not necessarily fall at the same pace.
A Second Job Becomes Necessary to Keep the Business Going
The financial consequences have extended into Lawyer’s personal working life. CBC reported that she had taken a side job to help make ends meet after American sales deteriorated. That decision illustrates a reality often overlooked in discussions about tariffs: independent business owners do not always have the financial reserves available to larger corporations. When customer orders disappear, they may need to replace income immediately rather than wait for trade negotiations or government support programs to produce results.
Sugarhouse Ceramic Co. is more than an online storefront. Its website describes a creative workshop where Natasha and Brett produce pottery, welcome customers and teach classes. The couple also emphasizes supporting other local businesses through their operations. That business model depends on sufficient revenue to purchase supplies, maintain equipment and sustain daily activities. Taking outside employment may provide short-term financial stability, but it also creates another challenge for a small company built around its owners’ creative work. Time spent earning income elsewhere is time that cannot be devoted to producing inventory, developing designs or finding new customers. The pressure is therefore both financial and operational.
America’s Removal of the $800 Duty-Free Exemption Changed Small-Parcel Trade
One major obstacle for Canadian online businesses involves changes to the United States’ treatment of small international shipments. Previously, many commercial packages valued at US$800 or less could enter the country without ordinary import duties under the de minimis exemption. That arrangement made cross-border shopping relatively straightforward for customers purchasing modestly priced items from independent sellers. However, the United States suspended the general duty-free exemption for low-value shipments beginning August 29, 2025.
U.S. Customs and Border Protection subsequently formalized new procedures covering shipments sent through postal networks and other delivery methods. As a result, packages that once benefited from simplified duty-free treatment can now face applicable customs charges, documentation requirements and additional processing. These changes are particularly relevant to companies selling individual handmade products rather than shipping large commercial orders. A customer purchasing one ceramic mug may be more sensitive to extra delivery charges than a wholesale buyer placing an expensive order. The removal of the exemption does not mean every package faces the same tariff rate, but it has made the overall purchasing process more complicated and potentially more expensive.
New 50% U.S. Tariffs Have Added to the Uncertainty
The trade environment became more difficult again in August 2026, when the Trump administration imposed additional 50% tariffs on specified categories of Canadian imports under Section 338 of the Tariff Act of 1930. The measures took effect on August 22 and cover a range of goods, including selected furniture, clothing, electronics, plastics, sporting equipment and industrial products. Unlike some other tariff measures, the new duties generally do not provide an exemption simply because a covered product satisfies Canada-U.S.-Mexico Agreement origin requirements.
However, the 50% rate does not automatically apply to every Canadian-made product. A business must determine whether its specific goods fall within the relevant U.S. customs classifications. The publicly available reporting about Sugarhouse Ceramic Co. does not establish that every ceramic product sold by the company faces that additional tariff. Nevertheless, the wider trade confrontation has created uncertainty for retailers and consumers across multiple industries. With some American buyers facing additional costs and complicated import requirements, even businesses outside the most heavily tariffed categories can experience weaker demand. For small exporters, the combined effect of changing rules and customer hesitation can be extremely damaging.
Higher Costs Leave Businesses Choosing Between Profits and Customers
Tariffs create a financial problem that cannot always be solved by simply raising prices. In the United States, import duties are normally paid by the importer of record, but the economic burden can ultimately fall on importers, sellers or consumers depending on contracts and pricing decisions. Canadian businesses trying to preserve American sales may choose to absorb some expenses, reduce their selling prices or arrange delivery terms that make additional charges less visible to customers. Each option can reduce profitability.
Consider a hypothetical Canadian product that sells for US$80 and is subject to an additional 50% import duty. That charge would add US$40 to the import cost before other applicable fees. Passing the entire amount to the customer could weaken demand, while absorbing it would reduce the money available to cover production and operating expenses. The example does not represent a verified tariff calculation for Sugarhouse products, but it illustrates the commercial dilemma. Statistics Canada reported that 27.4% of businesses surveyed in the third quarter of 2026 had passed tariff-related cost increases to customers during the preceding year. Many other firms had absorbed costs or experienced no such increases, demonstrating that businesses are responding in different ways.
Another Nova Scotia Business Moves Inventory Into the United States
Lawyer is not the only Nova Scotia entrepreneur struggling with the trade dispute. Laurie Dolhan, who operates Hook, Line and Tinker in Wolfville, sells embroidery kits and other creative products. Following Donald Trump’s victory in the 2024 U.S. presidential election, she began preparing for potential trade disruptions by exploring ways to protect her American customer relationships. Her response included establishing a U.S. business entity and partnering with a distribution centre south of the border.
Dolhan told CBC that her products were not directly subject to the tariffs affecting some other Canadian exports. Nevertheless, she believed American consumers were increasingly concerned about cross-border purchases and possible customs complications. Keeping inventory in the United States helped simplify order fulfilment and reassure customers, but she reported that sales continued to decline. Her experience demonstrates how trade uncertainty can affect companies even without a direct tariff on their merchandise. Establishing a foreign distribution arrangement also requires planning, administration and financial resources that may not be available to every small business. For entrepreneurs already struggling with declining orders, the cost of creating a new logistics system can itself become another obstacle.
A B.C. Retailer With 80% American Exposure Faces Similar Risks
The problem extends beyond Atlantic Canada. In Langley, British Columbia, Milestone Equestrian owner Shelby Dennis has confronted similar uncertainty. Her business sells horse equipment, apparel and online training products, including specially designed bridles intended to improve comfort for horses. According to reporting based on a CTV News interview in August 2026, between 70% and 80% of her customers were American. That concentration exposed the company to potentially serious consequences from additional U.S. tariffs.
Dennis said she was unwilling to proceed with her normal holiday inventory purchases because she could not predict whether American demand would remain strong. Her business ordinarily prepares for the Black Friday and Christmas shopping periods by ordering products in advance. However, her bestselling bridles belonged to a category that could potentially face an additional 50% tariff under the new measures. Stocking large quantities before knowing whether customers would accept higher prices presented a significant risk. While her circumstances differ from Lawyer’s pottery business, both cases show how customer concentration can amplify trade uncertainty. A small company can have a desirable product and established buyers yet still face major financial difficulties when international trade rules change.
Canadian Small-Business Surveys Reveal a Wider Profitability Crisis
The concerns expressed by individual business owners are supported by wider industry research. In September 2026, the Canadian Federation of Independent Business reported that 46% of small exporters responding to its survey had products directly affected by the latest tariffs. Among small exporters affected by the trade war, 18% said they would cease to be financially viable if the dispute continued for at least three months. The survey included 1,545 respondents and highlighted manufacturing, wholesale, retail and construction as particularly exposed sectors.
Statistics Canada’s third-quarter 2026 business survey provided another indication of the economic strain. Approximately 32.2% of Canadian businesses expected U.S. tariffs on Canadian products to negatively affect their operations over the subsequent 12 months. Manufacturing companies were especially concerned, with 49.7% anticipating a negative impact. However, the survey also found that nearly 47% of businesses expected no direct effect, showing that the damage remains uneven. The figures explain why some Canadian industries continue performing relatively well while individual businesses experience severe difficulties. The broader economic picture can appear manageable even when particular exporters face collapsing demand, shrinking margins and questions about their long-term survival.
Canada’s Strong August Exports Hide the Difficulties Facing Smaller Sellers
Recent national trade statistics present an interesting contrast with the experiences of struggling business owners. Statistics Canada reported that merchandise exports increased 2.5% in August 2026 to approximately C$77.9 billion. Imports fell 2%, producing a merchandise trade surplus of about C$4.2 billion. Exports to the United States increased particularly strongly, with Reuters reporting an 8.1% monthly rise as businesses accelerated shipments ahead of newly implemented American tariffs.
Those figures might suggest Canadian exporters were enjoying favourable conditions, but the underlying explanation is more complicated. Some manufacturers and American customers moved orders forward to avoid additional charges, temporarily increasing trade volumes before new restrictions took effect. Other sectors benefited from stronger energy demand and higher commodity prices. These developments do not necessarily reflect conditions facing small consumer-goods businesses shipping individual packages. A major energy producer can substantially increase Canada’s export totals while a pottery studio experiences its weakest sales in years. Economists have therefore cautioned that August’s strong merchandise trade numbers may not fully reflect the consequences of the newer tariffs, which became effective late in the month.
Finding Canadian Customers Cannot Immediately Replace the U.S. Market
Diversification has become a frequent recommendation for Canadian companies facing American trade barriers. Businesses are encouraged to expand domestic sales, find customers in Europe or Asia, and reduce dependence on the United States. The Bank of Canada has acknowledged that many exporters are actively pursuing these strategies. However, it has also emphasized that establishing new markets, transportation arrangements and supply relationships can be expensive and time-consuming.
For a company such as Sugarhouse Ceramic Co., building a larger Canadian audience could offer some protection against future trade disruptions. Its existing studio, local retail activity and pottery classes provide ways to reach customers beyond international online sales. Yet replacing an American customer base that historically represented roughly 80% of the business requires far more than changing a shipping destination. New consumers must discover the brand, understand its products and become regular customers. Advertising, distribution and customer acquisition can all consume money that a struggling business may lack. The Bank of Canada noted in September that exporters expanding beyond the United States were often strengthening relationships with existing overseas customers rather than entering entirely new markets. That finding underscores how difficult rapid diversification can be.
Government Support and Trade Negotiations Leave Businesses Waiting
Ottawa has established programs intended to help companies manage the disruption caused by U.S. tariffs. The Trade Commissioner Service directs affected exporters toward financing and advisory resources from the Business Development Bank of Canada, Export Development Canada and other organizations. Available options include business loans, export credit support, market intelligence and assistance with navigating customs requirements. However, eligibility varies, and financing is not the same as compensation for lost revenue. Businesses must determine whether a particular program can address their circumstances.
Meanwhile, negotiations between Canada and the United States have not delivered a comprehensive settlement. On October 8, U.S. Trade Representative Jamieson Greer indicated that Washington was maintaining its position while senior-level communication continued. For Canadian entrepreneurs who depend heavily on American customers, that leaves considerable uncertainty about future tariffs and market access. The experiences of Lawyer, Dolhan and Dennis illustrate the human consequences of that uncertainty. Their businesses were built around products and relationships developed over years, yet those relationships can be disrupted by political decisions made far beyond their communities. The immediate challenge is preserving sufficient revenue to remain operational while longer-term trade arrangements take shape.
