Montreal textiles industry braces for latest U.S. tariffs

Montreal’s textiles industry is bracing for the impacts of U.S President Donald Trump’s latest round of tariffs.

“We can absorb two or three, four or five percentage points,” said Greg Nicoghisian, VP of Global Sales at Pajar, a winter apparel company based in Montreal.

“But the moment you’re in the 10, 15 and in this case 50 to Canada, it’s beyond what can be absorbed.”

Pajar is one of the few clothing and apparel companies that still manufactures some of its products in Montreal.

Factory workers in the heart of the Plateau neighbourhood still hand-stitch high-quality boots to be sold across Canada and in the United States.

“It doesn’t exist. We’re probably the last ones,” Nicoghosian said.

If the new tariffs go into effect in less than 30 days, maintaining these local manufacturing costs could be impossible.

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“It’s a big threat to the survival of the factory, of course, because you’re looking at huge increases in tariffs and definitely reduced business,” he said.

The announcement came as a shock to Quebec manufacturers, like Pajar, who until now have been shielded from Trump’s tariffs by CUSMA, the free trade agreement between Canada, the United States, and Mexico – that Trump negotiated and signed in 2019.

“CUSMA was your comfort zone,” Nicoghosian said. ”We produced for years. We shipped to the U.S., and then CUSMA is in jeopardy or under review. It’s a question mark, and then this happens."

The result will be higher prices for American consumers. But, with the already high cost of living, Nicoghosian is not sure how much of a price increase they’ll be willing to accept.

“It definitely makes us worry and start thinking about our future,” he said. “But I am an optimist. I think there will be a solution. There are definitely tactics happening here, and it’s politicians running the economy.”

Without a deal in place that provides certainty for manufacturers, business groups worry investors will continue to look elsewhere.

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”We’re losing investment. We’re losing GDP. We’re losing manufacturing jobs as well in the different regions of Quebec,” said Veronique Proulx, president of the Federation of Quebec Chambers of Commerce. “There’s the impact it has today. But we have to look in the future on the impact it will have on our economy.”

With new sectors now caught under the weight of the trade war, there is even more pressure on the government to find a solution.