Businesses warn of ripple effects from tariffs because of rising costs

Trump’s tariffs are whipping up a swell of patriotic fervor among Canadians who are so furious about the “unjustified” and “ill-conceived” duties that they are boycotting U.S. products, Canadian politician Karina Gould said.

“As Canadians, we feel that the relationship with the United States, the trust has been broken,” Gould, a Canadian Liberal Party member and candidate for prime minister, told CNBC’s “Squawk Box” on Thursday morning.

“I have never seen this kind of patriotism in Canada, where you have little old ladies going to the grocery store and choosing to buy Canadian products over American products,” she said.

“You know, Canadians are known for apologizing, but we’re not going to back down right now, and we’re not going to apologize for defending our economy, our jobs and our way of life.”

Gould also rejected questions about whether Canada should consider dropping some of the tariffs it already had on U.S. products in order to strengthen its case.

She noted that Trump is basing the tariffs on alleged fentanyl trafficking from Canada, even though “miniscule amounts” come to the U.S. through the northern border.

“But if that’s what he cares about, well then let’s put together an inspection team at the border to inspect every truck that goes south for fentanyl and every truck that comes north for illegal guns,” she said.

— Kevin Breuninger

The semiconductor industry is particularly vulnerable to tariffs due to how globally integrated its supply chains are, according to Chris Miller, Tufts Fletcher Schooler professor and ‘Chip War’ author.

Even if chips are assembled in the U.S., many of the components used are not manufactured in the U.S., Miller noted.

“The complexity of the supply chains makes devising a tariff policy around carve outs very, very difficult, which is why the industry is hoping there won’t be any changes at all — because they’ve been structured around the assumption that you can move goods back and forth across borders without this type of tariff uncertainty,” Miller told CNBC’s “Squawk Box” on Thursday.

— Hakyung Kim

The White House is considering exemptions for some agricultural goods from the tariffs on Mexico and Canada, according to Bloomberg News.

“As far as specific exemptions and carveouts for the agriculture industry, perhaps for potash and fertilizer, et cetera — to be determined,” Agriculture Secretary Brooke Rollins said on Wednesday, according to Bloomberg. Canada is a major source of fertilizer supplies for the U.S. agriculture industry.

A White House spokesperson also said on Wednesday that Trump was “open” to more tariff exemptions after delaying auto industry levies for one month.

— Jesse Pound

Automaker Stellantis thanked President Donald Trump for the one-month tariff exemption on automakers and vowed it will grow its business in the U.S.

“We share the President’s objective to build more American cars and create lasting American jobs. We look forward to working with him and his team,” the company said in a statement.

Shares of the Jeep and Dodge-maker were down 1.6% in premarket trading Thursday, after gaining 9.24% on Wednesday.

— Michelle Fox

Tariffs are weighing heavily on the minds of business executives, with concerns expressed in multiple surveys this week over rising costs and the inability to pass higher prices on to consumers.

“The incoming tariffs are causing our products to increase in price. Sweeping price increases are incoming from suppliers. Most are noting increases in labor costs,” a purchase manager in the machinery sector said in the ISM manufacturing survey for February. “Inflationary pressures are a concern. Our company is working diligently to see how the new tariffs will affect our business.”

That response was representative across reports that showed continued expansion across the economy but increasing worries that President Donald Trump’s trade policy.

Worries over the new duties were not confined to the manufacturing sector. In the ISM services…