Waterloo region tech companies 'holding their breath' as proposed U.S. tariffs loom
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Waterloo region tech companies say the tension over whether U.S. tariffs will actually happen is creating a lot of economic uncertainty within the companies themselves and with investors.
Joel Semeniuk, the chief strategy officer at Communitech, says it's causing local tech companies to rethink how they do business between both countries.
"Tech companies that are doing things in robotics and hardware and producing physical things are realizing and seeing that there's an integrated supply chain," Semeniuk told CBC News.
"Some of these products cross the border a few times before they become finished products… So these companies are thinking about where they're sourcing the materials from and rethinking their supply chain," said Semeniuk.
"But then there's the software side of things where, right now there's no immediate risk of tariffs on software. However, it has been mentioned. But these organizations sell to companies who could be impacted by tariffs as well."
U.S. President Donald Trump says he will slap a 25 per cent tariff on most Canadian goods as of March 4.
Trump also says his threatened reciprocal tariffs on specific goods set to come into effect in April "will remain in full force and effect."
Flipping tech companies
Guru Singh, the founder and CEO of Scispot, says the tariffs are creating uncertainty with investors.
Scispot provides a data platform to biotech and diagnostic labs that helps bring their scientific breakthroughs to market faster.
Singh says they're figuring out what the tax implications will be or whether they'll work through an American subsidiary or "flip" the company — that means leaving the country.
"That will not be our choice because most of our talent comes from Waterloo, Kitchener and the GTA. So it will be very challenging to move the company completely," said Singh.
"It doesn't take much time to move the company, but you cannot move your team overnight. So it will cause some disruption, but that's like a worst case scenario for a company if they have to move to a different jurisdiction, it will disrupt the process for sure."
Singh notes Scispot is not a location-dependent company and they're trying to create a global company headquartered in Canada.
Unnecessary tariffs
The Technology Councils of North America (TECNA), which represents 22,000 tech companies in the U.S. and Canada, including Waterloo region, has sent a letter to the Trump administration saying it opposes the tariffs and warns it will "harm businesses, disrupt supply chains and threaten jobs on both sides of the border."
"History teaches us that tariff wars are costly, unnecessary, and difficult to unwind once enacted. Once in place, they create ripple effects that harm industries, raise costs for consumers, and stifle innovation," said the letter.
"Instead of crippling U.S. companies with massive new taxes, we urge the Administration to prioritize policies that strengthen American businesses by supporting efficient trade, reducing costs, and maintaining our competitive edge in the global economy."
TECNA argues these tariffs will drive up costs for manufacturers, tech firms, and even digital services, making North America less competitive globally.
Shining the spotlight locally
At Communitech, Semeniuk says while "everybody's holding their breath" to see what comes next they continue to shine the spotlight on local companies and the Canadian market.
"Making sure that Canada also knows that we know that we have amazing startups that we can buy from at home," said Semeniuk.
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