Coffee roaster brings production back to Quebec after U.S. tariff ruling

An Eastern Townships coffee roaster is bringing its production back to Quebec following a major U.S. Supreme Court ruling that struck down controversial "reciprocal" tariffs.

Café William, which has operated in the province for nearly 40 years, is in the process of repatriating operations to Sherbrooke, Que. The move marks a reversal of a strategy the company adopted last year to survive the trade war.

"With tariffs of 25 and 35 per cent in the food sector — where margins are very low for manufacturers like us — we had to find a solution," said president and CEO Rémi Tremblay.

The American market represented between 30 and 40 per cent of the roaster's business volume, explains Tremblay.

That solution involved a cross-border partnership with a New Jersey roaster. Under the agreement, the American firm handled roasting and packaging for Café William's U.S. clients, while the Sherbrooke plant did the same for the partner's Canadian customers.

The shift was meant to bypass the reciprocal tariffs imposed last April by the Trump administration. However, after the U.S. Supreme Court struck down those duties last week, the company says it is now more than ready to return home.

In a statement, the company noted that, while they utilized work-sharing programs over the summer, they avoided permanent layoffs during the transition.

Now, the roaster claims its current business volume is higher than it was before the trade war began and it is looking to fill nearly 20 positions.

However, industry experts warn that the broader manufacturing sector remains on edge. 

Rosemarie Bégin is a senior director of economics and policy at the professional services firm PwC Canada. She said the U.S. tariffs are pushing more companies to consider a cross-border manufacturing model, but for now, cost assessments are being made. 

“We haven't seen a big movement towards that just because it's a big investment,” she said, noting the U.S. Supreme Court’s ruling has created even more uncertainty.

"We don't know what the next move will be.”

She said the legal back-and-forth could complicate upcoming Canada-U.S.-Mexico Agreement (CUSMA) negotiations. 

Bégin said moving production is not an easy decision to make, with many factors coming into play. Moving or building factories can take years and would only be in response to a long-term threat, she explained. But for a company like a coffee roaster, the move can make sense when considering the cost benefits, she said.