Aritzia, Canadian Tire and Lululemon are among Canadian retailers

Aritzia, Canadian  Tire and Lululemon  are among Canadian retailers  moving production  out of China
Tariffs and forced  labor concerns  are prompting companies  to reconsider their relationship with  China
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While recent headlines have focused on Donald  Trump's threatened tariffs  on Canadian products, retailers in  that country have been considering the  potential impact of additional tariffs  he has threatened  to impose on  Canadian goods  originating in China.
This could affect Canadian brands that manufacture products overseas and sell them south of the border.  This includes Groupe Dynamite, Aritzia, Lululemon and Canadian  Tire, all of which  were asked about  the tariff threats during their  recent earnings  calls.
"Knowing that  there will be a transition in the first quarter of the year,  we have already taken steps — I  won't get into  percentages — but  we have already taken steps to move more  manufacturing out of  China," said Andrew Lutfy, CEO of Groupe Dynamite,  during a recent call with investors. Montreal-based clothing  company Groupe Dynamite has been expanding in the  United States since  2007 and has 109 Garage stores and five Dynamite stores south of the border, according to its latest investor  presentation.
The trend of companies  moving production  out of China  is not new. Tensions between the  United States and China have been escalating for years, and tariffs that  began under the first  Trump administration  have been maintained under his  successor, Joe  Biden.
That has prompted  companies to make plans  to move, and  that has only  accelerated recently.  Shoe maker Steve Madden, for example, said it plans to reduce its  China-made products by  40%, up from a previous  goal of  10%. AnalysisA period of anxiety in  Alberta's oil sector, with  possible tariffs from Trump  in the coming days
As the Canadian government has matched  Sino-US trade restrictions with its own tariffs on Chinese electric vehicles, steel and aluminum, rising geopolitical tensions have prompted Canadian companies to examine their  business relationships with  China.
"The Canadian business community is  getting these signals and  understanding that there are potential vulnerabilities in having a significant portion of  the supply chain located in  China," said  business lawyer John Boscariol, a partner  at McCarthy Tétrault.

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