Lisa Parise, one of the founders of Matter & Co, peruses carpet samples on the Toronto-based design company's showroom floor.Nic Hotchkiss/The Globe and Mail
As Canada fights a trade war with the United States, one of the targets of opportunity for counter-tariff retaliation can be found under the feet of most Canadians living in apartment buildings, as well as many visiting hotels or working in offices: carpet.
While most of us walk all over carpet without noticing it, those who work with the stuff are having déjà vu from a year ago when U.S. President Donald Trump’s global tariff policy kicked off, and Canada released a raft of retaliatory tariffs targeted at politically sensitive states and companies.
Last time around, the tariffs may have been more bark than bite. Not so much this time.
“Nobody paid carpet tariffs the last time,” said John Margaritis, vice-president of sales and estimating with Armourco Solutions, a condominium refurbishing company that buys a lot of commercial carpet. He said that while carpets were listed among the tariffed goods by the federal Department of Finance, it was one of several imports that, so long as it was compliant with the free trade deal between Canada, the U.S. and Mexico, in most cases the extra taxes were not actually applied. “It slipped under the tariff code: Carpet that was produced in the U.S. in nylon that was extruded in the U.S., you were exempt under CUSMA,” he said.
This time, there is no exemption under CUSMA for the 25-per-cent tariff on these kinds of carpet. That means buyers are having to look to other international suppliers, since there are no domestic Canadian makers of the most in-demand high-grade broadloom commercial carpet.
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Experts expect the tariffs on a variety of construction inputs will be another unwelcome headwind for the already downtrodden new-home building market.
“I would say that it’s going to have a pretty dampening effect on people wanting to build,” said Ben Haythornthwaite, director of Toronto-area market analytics for real estate data company CoStar Group. “To have such a huge sway of a potential 50 per cent on appliances, heat pumps. Heat pumps are massive things; it’s about $10,000 for one unit that might do 1,000 square feet. And you’re putting 50-per-cent tariff on? It’s not an extra couple hundred bucks. That’s the sort of money that stops people making decisions.”
Trade retaliation against carpet may seem random, but most of the carpet produced by the multibillion-dollar American flooring industry comes from one place: Georgia, a politically sensitive state that leans Republican but has swung to Democrats statewide in recent election cycles.
“I knew it was coming,” said Lisa Parise, who runs the Toronto-based design company Matter & Co. “As a carpet girl, I was like, here we go.” Ms. Parise’s company is now primed to fill the gap created by tariffs on carpeting, since two years ago she struck a deal to distribute carpeting from the French company Balsan, one of the few international brands that can compete with U.S. producers. Balsan was founded in 1751 and is now part of the global carpet and flooring giant Belgotex International.
Matter & Co is Toronto's sole importer of European carpets. Ms. Parise works with operations manager Luke Forhan, top, and fellow founder Jordan Molson.Nic Hotchkiss/The Globe and Mail
At the time that she cut the deal with Balsan, Ms. Parise said, it was simply about having more options for her clients. Now it looks like prophetic foresight.
“We went to Europe out of necessity; it just so happened that Donald Trump decided to go insane,” she said. “We picked up a major American mill to complement our offering, and now nobody wants it. We’re trying our best to mitigate the losses.”
Ms. Parise used to work for one of the big Georgia companies, Interface Inc., and said that, just a few years ago, the Toronto market was one of the biggest for the carpet industry, representing close to $30-million a year in sales.
American carpeting is made using solution-dyed nylon, a process that keeps the colours from fading, and woven on Card-Monroe ColorPoint machines. That combination has become the gold standard in commercial carpeting, and Balsan was the only European supplier she could find that used the same technology and product.
“Ironically, the European prices were a little bit less, about 5 to 10 per cent less even factoring the euro. Now, with the tariff, we’re looking at huge, huge savings,” Ms. Parise said. Early in 2025, she received a similar flurry of interest from clients turned off by Mr. Trump’s 51st state rhetoric who were looking for non-U.S. options: “It wasn’t financial; it was a principles thing; they didn’t want to do it.”
The Matter & Co. team workshop project palettes on the floor of their Toronto showroom.Nic Hotchkiss/The Globe and Mail
When tariff fears waned in early 2025, many Canadian buyers went back to the well-established Georgia producers. Now, those U.S. companies are having mixed reactions about how to manage the tariff costs.
“There’s one project we had with a Shaw product, they hurried up and got it across the border in time,” said Mr. Margaritis, referring to Shaw Industries Group Inc., headquartered in Dalton, Ga. “I have another project where we’re shortlisted, so I reached out to my Shaw dealer; they are absorbing 5 per cent [of the existing 25-per-cent tariff].”
He’s proposing to the client that they each pay half of the remaining 20 per cent to keep the project on track. Still, it can be a big pill to swallow when a carpet order for updating hallways in a condominium building could cost $150,000 in material alone. As the trade war deadline approached, many of the U.S. companies took a “wait and see” approach to figuring out how to handle the extra costs, he said.
For example, another supplier is arguing with Mr. Margaritis about an order placed weeks ago that’s supposed to be delivered in October. “This dealer told me I couldn’t cancel, even though it hadn’t gone into production; I’m not sure what I’m going to do with that,” he said.
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Russ DeLozier, president of The Carpet and Rug Institute, the industry’s trade organization, pointed to the decades-long stability and predictability of supplies from Georgia and the U.S. in an e-mailed statement. “As new policies take effect, the industry will remain committed to ensuring Canadian consumers have access to the carpet products they need,” he said.
Ms. Parise recently booked a deal with a senior living facility for Balsan carpeting, and she’s relieved she won’t have to go back and tell them it might cost 25 per cent more. If she has one message to Canadian policy-makers it’s to make it easier to import from Europe. “Our stuff goes into customs hold all the time, versus bringing it in from Georgia,” she said. Still, delivery timelines are about the same: eight to 10 weeks from order time. Despite it all, she bears no ill will toward her American suppliers.
“I would love it to be over; we love our American factories,” she said. “We hope the tariffs die because our customers are suffering and so are our friends across the border.”
However, Mr. Haythornthwaite argues that if certainty of supply is the goal for businesses looking to import goods, it’s long past time to consider diversifying from U.S. suppliers.
“Look at who you’re dealing with: Knowing what’s coming around the corner is not what we’ve been used to for the last couple of years,” he said.