Instead of sending mineralized water filters directly to the homes of American customers, Delta, B.C.-based Santevia Water Systems will have them make a pit stop at a warehouse stateside.

The change might help some customers get their filters faster, but that’s not why the company is doing it. As U.S. President Donald Trump’s tariffs on Canadian and Mexican imports officially kick in, Santevia is moving to keep a lid on costs. Instead of placing a 25 per cent tariff on the retail price of the filter, the markup will be levied on its cost, because a U.S. business will serve as a middleman.

“We now have a huge fixed cost, which is partnering with a new logistics company,” said Matthew Gohl, CEO of Santevia. The company doesn’t plan to give up on the U.S. market, which makes up about 30 per cent of its $12 million in annual sales, but will focus on expanding in Australia and Europe if the tariff war drags on. “Who really loses here is the American consumer,” he said. 

Santevia joins businesses and investors around the world that are bracing for the impact of Trump’s tariffs, which have sent major stock indices plunging. The S&P/TSX Composite fell 1.10 per cent, while the S&P 500 saw its biggest decline since December. The Canadian dollar continued its slide to $0.69, with the sell-off extending to Big Tech. 

The psychological impacts of tariffs are already affecting businesses of all sizes and consumers, RBC’s CEO Dave McKay said at an investor conference Tuesday morning. Housing starts, consumption, M&A activity and small business hiring have all slowed in both the U.S. and Canada, McKay said, adding the environment makes it more difficult to “put capital to work.”

Half of Canadian business leaders surveyed by consulting firm KPMG last week said they have already laid off workers or cut production in advance of the tariffs, with more than a quarter saying they will have to cut staff if they extend beyond four to six months. About two-thirds said they’ll be able to weather a tariff war that lasts more than a year. However, 30 per cent said they expect significant hits to their profits at that point, while three per cent said they would likely go out of business completely. 

Businesses from chocolatiers to mining giants are upending supply chains, seeking customers and suppliers outside the U.S. in response to the tariffs. Swiss chocolate maker Lindt & Sprüngli said it will source chocolate sold in Canada from Europe to avoid Canadian counter-tariffs. Vancouver-based Teck Resources CEO Jonathan Price said the mining company “will send our metal elsewhere” at an event in Toronto on Tuesday. 

Loblaw spokesperson Catherine Thomas told The Logic in an email that the grocer has been looking for alternatives to U.S. suppliers. The company is also working with its suppliers to help them soften the impact of cost increases caused by tariffs “where possible,” she said.

Toronto-headquartered communications firm Sovereign Advisory has scrapped plans to expand to the U.S. due to the “pain” the country is inflicting on Canada, managing partner Wojtek Dabrowski wrote in a LinkedIn post. Instead, the company is “doubling down” on Canada and looking to the U.K. for its expansion plans.