Rosie Alyea, the chief sprinkle officer at Sweetapolita in Toronto, has had a bitter year.
First, the United States blocked cheap imports from entering the country duty-free, which made a mess of her sales to American customers.
“That was extremely disruptive,” she said.
Then last month, after trade talks between the United States and Canada collapsed, the Trump administration imposed punishing new tariffs on a wide and seemingly arbitrary list of items that included wine, dairy products and hockey sticks. Among them were several ingredients in Ms. Alyea’s sprinkles, like cellulose gum and glucose.
Some 2,500 miles away from Sweetapolita’s headquarters, in Santa Cruz, Calif., Zach Davis suddenly wondered: “Are sprinkles on the list?”
The question was not a trifling one. Mr. Davis is an owner of the Penny Ice Creamery, which buys thousands of dollars’ worth of Sweetapolita’s medleys of colorful sprinkles every year.
“We had to figure it out pretty quickly,” Ms. Alyea said.
In the escalating trade war between the United States and Canada, both countries seem intent on hurting the other just enough to make a point. On Tuesday, President Trump moved to ban a subset of Canadian products after Canada imposed its own retaliatory duties on an array of American exports.
Small companies are caught in the cross hairs. Many businesses are rushing to untangle the byzantine roster of tariffs that both countries have issued to determine whether they are affected.
The tit-for-tat has prompted rebukes from business organizations and disrupted main streets on both sides of the border.
“We cannot allow small business owners to become cannon fodder in the trade war,” Dan Kelly, the president of the Canadian Federation of Independent Business, said in a statement last week.
John Arensmeyer, chief executive of Small Business Majority, a nonprofit advocacy group, warned in a statement of “lasting damage to U.S. small businesses.” He added that the group had heard from owners across the country, who said they would have to raise prices in response to the tariffs.
Mr. Davis of the Penny Ice Creamery prides himself on using organic, local ingredients in his ice cream. But a few years ago, he became so enamored with Sweetapolita’s sprinkles, which come in a variety of whimsical shapes and colors, that he decided to make an exception.
“You got to make the kids happy, and they do like rainbow sprinkles,” he said.
Every couple months, he orders about 100 pounds of sprinkles, at a cost of $1,000 to $3,000, for his seven creamery locations. He recently ordered a batch of Sweetapolita’s birthday party sprinkle medley, which features confetti sequins and edible glitter, to celebrate his company’s 16th anniversary.
When it came to tariffs, Mr. Davis has paid them on refrigerators and freezers from China and Vietnam. Besides that, he did not have much experience with import duties before tensions between the United States and Canada heated up again this summer.
“I didn’t think about it a whole lot in the moment, other than to be kind of annoyed that this was still happening,” he said.
But as the end of August approached and it appeared that Mr. Trump’s 50 percent tariff on some Canadian goods would kick in, he grew nervous. Unable to get answers about whether the Canadian confections would carry the sky-high tariffs, he resolved to ask Sweetapolita directly.
Ms. Alyea knew the tariffs were bewildering for her customers. She was eager for clarity, too, especially since volatile trade policy with the United States had already shaken her business.
Last year, the Trump administration ended a rule that had permitted shipments valued at $800 or less to enter the United States without being subjected to taxes. That threw her direct-to-consumer business in the United States into disarray, pushing up shipping costs and depleting Sweetapolita’s profits.
When the latest round of tariffs on Canadian products went into effect on Aug. 22., she scoured customs forms for any indication of higher duties. To simplify orders for her American customers, who constitute half of her sprinkle business, she had long been registered as an importer of record. That meant she managed all the paperwork on shipments into the United States.
“We had multiple shipments just about to cross, so it was literally, ‘Let’s see what happens,’” she said.
Sprinkles fall under a classification code for confectionary that was not on the Trump administration’s list, she said, even though some ingredients in her sprinkles were. Still, she was relieved when she did not see any evidence that the 50 percent tariffs were being applied. Shipping on orders seemed to be proceeding as normal.
Ms. Alyea said she planned to communicate the good news to her American customers through newsletters and on her website. She also does not want to jinx anything. After all, the trade war has been unpredictable — so much so that it has motivated her to shift her focus to growing her business in Canada.
“We’re really lucky right now,” she said. “We’re just adjacent to a disaster.”
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