Canadian manufacturer eyes U.S. as firms 'cannot hold off for too long anymore'

Detailed summary

A Canadian textile maker battered by U.S. tariffs is looking to expand south of the border, illustrating how the trade war could leave a lasting mark on the country’s…

A Canadian textile maker battered by U.S. tariffs is looking to expand south of the border, illustrating how the trade war could leave a lasting mark on the country’s manufacturing sector.

Fine Cotton Factory Inc. produces fabrics for clothing, mattresses and bedding at its Toronto mill, with roughly half of its sales tied to U.S. customers.

The company saw those sales tumble as tariffs of up to 50 per cent on some products prompted American buyers to delay orders and run down inventories, said Skip Kann, executive vice-president of sales and marketing at Fine Cotton Factory.

Orders are now starting to recover, but he said uncertainty over the Canada-U.S. trade relationship has the company already moving some production to the United States.

Kann said Fine Cotton Factory is shipping some unfinished fabrics to U.S. contractors for additional processing, reducing its exposure to tariffs on finished products, as it lays the groundwork for a larger American expansion.

“There’s been damage done to the relationship between the U.S. and Canada,” he said in an interview.

“We are going to put some form of our business in the U.S. as a long-term plan so that this can never happen to our company again.”

Kann said he plans to open a U.S. warehouse before sourcing equipment and beginning production early next year.

Even the removal of tariffs or a new Canada-U.S. trade agreement may not alter those expansion plans, he said.

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