European expansion possible for Quebec businesses?

Living it Up in Europe: Quebec Firms Shift Gears Amid International Tensions

With President Trump's tariff announcements causing ripples in Canada, Quebec companies are jumping on the diversification bandwagon, particularly in the European market. Take Nanuk, a Quebec-based protective suitcase manufacturer, for example. They've set up shop in a picturesque Dutch village, not for its scenic beauty, but for its strategic location near the local airport and major European ports – a boon in uncertain times.

Nanuk's European distribution center is buzzing with activity, boasting well-stocked shelves and a 30% growth rate for 2025 that usually takes a year to achieve. They're thriving thanks to European stability and the free trade agreement between Canada and Europe, acting as a dependable, tariff-free partner in contrast to their American competitors.

"Our products are usually more than half of our turnover. However, we're maintaining global growth of 12% now," grins Herman Vaszlovsky, Nanuk EU's general director, in the midst of the action. The company has gone on a hiring spree since the start of the year, with 2,000 to 4,000 protective suitcases transiting through Eelde each week.

Despite being exempt from tariffs related to the Canada-United States-Mexico Agreement (CUSMA), a part of Nanuk's production coming from Vietnam and China is affected by new American tariff rules. Yet, for now, the company bears the brunt of these additional costs.

The Quebec Delegate General in Brussels, Genevieve Brisson, is leading the charge in helping Quebec companies diversify towards Europe. She's optimistic about the imminent shift, as there's a growing European concern about their own economic dependence, particularly in the defense and energy sectors.

Marie-Ève Jean, Vice-President of Exports at Investissement Québec, however, urges a more measured approach. She admits to nudging firms away from scenarios where the targeted market may not be the best fit. Still, the current trade friction with the U.S. has served as a much-needed alarm bell in Quebec. With over 70% of their exports heading to the American market, the province must encourage businesses to keep their eggs from being in one basket.

Florian Mayneris, a professor at ESG UQAM, applauds the government's efforts to diversify markets. However, he predicts a future where politicians realize they cannot compel every business to diversify, leading to targeted aid for those wishing to expand internationally.

It's not all sunshine and roses, though. José Chagnon, CEO of Nanuk, emphasizes that the success story of being already established in Europe makes diversification easier. He warns that companies without prior international footing will find it challenging to join the diversification race overnight.

The sense of unease and profitability concerns pervade businesses, but the current situation with the American government serves as a wake-up call in Quebec. Aluminum companies, for instance, are rethinking their strategies, acknowledging that it's still more profitable to sell to the U.S. than Europe, despite the lower European prices and the tariff burden on all aluminum worldwide.

So, while some companies are expanding abroad, others are holding back, waiting for a clearer picture to emerge. Meanwhile, Nanuk is taking its European success story one step further, planning trips to Asia to avoid taking the current situation for granted. Whether it's Europe or Asia, the message is clear: the time for market diversification has come.