After President Donald Trump imposed a new series of import bans on certain Canadian goods that became effective Tuesday, American consumers and small business owners in particular could bear the brunt of the impact, investment advisor Karan Ramchandani told Fox News Digital in an exclusive interview.

“The small and mid-business owners — specifically those who have businesses around the U.S. and Canada border — should be worried,” Ramchandani, the managing director for capital markets at investment firm Post Oak Group, told Fox News Digital.

Amid an increasingly volatile trade war, Trump imposed additional import controls on approximately $1 billion in Canadian goods that cover dairy products, alcohol and certain automobiles.

This selection of products alone could lead to increased inflation, but they could also spur an inflationary reaction because of downstream production impacts, Ramchandani explained.

“The moment it hits production, hits factories and lumber, and, for example, automobiles, it’s a problem which will hit the consumer because prices will go up. Prices are always initially absorbed by the producer, by the manufacturer when tariffs come up. But if it doesn’t stabilize, then it eventually gets passed on to the consumer,” Ramchandani said. 

“A majority of these goods were already under tariffs, so it’s not that they are new goods under tariffs.

“But when you apply the same tariffs, which are happening on Jan. 1 on automobiles, steel,and lumber — and those areas which directly hit the factories and production — that will directly impact the economy long-term.”

He also revealed there is another potential unintended consequence of the saga due to Trump’s decision not to participate in the automatic renewal of the United States-Mexico-Canada Agreement (USMCA).

“Capital is lying on the corner because you cannot make large, long-term investment deals — let’s say, for example, moving a plant from Canada to the U.S. … You cannot do that unless your trade policy is stable. Right now, the USMCA is being questioned every year,” Ramchandani said. 

“The U.S. has refused to renew, which means it is still in place, but now every year it will be reviewed, whereas, initially, when you renew the agreement, it was renewed every 16 years.

“From one side, you want businesses to invest in the U.S. and, let’s say, build a plant. But from the other side, when you question USMCA, ‘Why would somebody build a plant and invest a billion dollars into the country when the policy doesn’t support it,’ that’s the whole question, right? It’s not a favorable time right now to invest.”

Ultimately, Ramchandani said the impact of the trade war could push investors, supply chains — and Canada — down other avenues.

“I think supply chains will be rerouted eventually,” Ramchandani predicted. “The small players will take a longer time and may take a hit to their business temporarily, but they need to reroute revenue to other countries and other places, find different ways of supply chain and procure cheaper materials from other countries.

“Eventually, it’s going to be export/import outside of Canada and the U.S. basically. That’s the only way economies will stabilize themselves, like Canada is already doing.”

Canada, Ramchandani explained, has already decreased its share of exports going to the U.S. from 76% in 2024, according to the Royal Bank of Canada, to less than 33% today.

“This is a new development in the last one to 1½ years, which is a big sign that capital is moving between Europe, Canada and other countries,” Ramchandani told Fox News Digital.

Canadian Prime Minister Mark Carney has already met with European Union officials after failed negotiations with the U.S. and worked out a deal to increase bilateral trade volumes between the two bodies by 80%. 

FOX Business contacted the White House and the Office of the Canadian Prime Minister for further comment.