Metal casket maker ready for trade war to end after steel hit with 50% tariff

At precisely noon, the casket welders, sanders and paint sprayers are turned off and a quiet hum settles over the Magog Caskets factory floor in southeastern Quebec.

"The new closing time," says one of the workers as he removes his ear buds.

"New" as a result of the imposition of tariffs and counter-tariffs between the United States and Canada.

"The Trump administration is charging me a tariff. It's like, whatever I do, [the U.S.] is trying to strangle me," said Nicolas Lacasse, the owner of Magog Caskets. "And when I try to defend myself, it's like Canada is holding my hand, so I can't defend myself."

Magog Caskets is the only manufacturer of metal caskets in Canada, which it sells primarily in Quebec and the U.S. And the primary material used to make those caskets? Steel.

Not only has the U.S. imposed a 50 per cent tariff on aluminum and steel, but Canada has imposed a reciprocal tariff of 25 per cent.

So Lacasse has had to reduce his employee workload from 39 hours a week to only 15 to 20 hours because he no longer makes a profit.

Like thousands of businesses across Canada, Lacasse has had to come up with the least painful option when faced with tariffs and counter-tariffs.

His first option is to continue buying Canadian steel but face a 50 per cent tariff on the finished caskets going into the U.S. Option 2, and the one he chose: buy American steel, eat the cost of the exchange rate and pay the 25 per cent counter-tariff on the raw material.

"That was the most cost-effective one, actually," Lacasse said. "It's still creating trouble here, though. I'm running at a loss."

According to an analysis by Statistics Canada, 53 per cent of import-export companies in Canada think the tariffs will have a high-to-medium impact on business within the next three months.

April saw Canada's largest recorded merchandise trade deficit, as companies attempted to minimize the damage to consumer pocketbooks.

"We are seeing a large number of companies take all sorts of aggressive steps to either cancel contracts, avoid shipping or otherwise renegotiate pricing, for example, with their customers or their suppliers," said William Pellerin, a trade lawyer with the firm McMillan LLP.

"It's very destabilizing. There's no question about it."