Vermont says Quebec outreach created a pipeline of companies; tariffs and uncertainty are slowing some moves

Tim Tierney, director of international trade and business recruitment at the Agency of Commerce and Community Development, told the Commerce & Economic Development Committee on April 30 that a contracted representative in Quebec has “created a pipeline for us” that has brought eight or nine companies to Vermont but that proposed and threatened tariffs have made some firms more tentative about locating here.

The pipeline is managed by a Quebec-based contractor known to the department as CDAP, Tierney said. The contractor identifies Quebec companies poised to enter the U.S. market, makes first contact in French, and brings promising firms to Vermont for follow-up meetings with state economic development staff and regional development corporations. “They've created a pipeline for us,” Tierney said. “It takes a village, as they say, to get someone here.”

Why it matters: state officials said foreign direct investment can create and retain jobs and help keep manufacturing supply chains local. Committee members pressed Tierney on the effect of national trade rhetoric and the near-term consequences for tourism and retail sales when Canadian visitors cross the border less frequently.

What the department reported - Results to date: Tierney reported the state had contacted “hundreds” of companies and contracted eight or nine that have taken steps to operate in Vermont. Some new entrants have five to six employees; at least one transaction involved a Canadian buyer acquiring an existing Vermont firm and retaining roughly 100 jobs in Springfield, Tierney said. Other firms seek U.S. defense or aviation contracts. - Sectors and partners: The department is pursuing manufacturing and semiconductor supply‑chain opportunities in the Northeast Semiconductor Manufacturing Corridor, a multistate memorandum of understanding that links Bromont, Quebec; Essex Junction, Vermont; and Fishkill, New York. Tierney said the corridor could attract suppliers and workforce to the region. - Tariffs and USMCA: Tierney told the committee that the United States–Mexico–Canada Agreement (USMCA) remains the governing trade framework for most goods and that firms that meet the agreement’s rules of origin can avoid tariffs. “USMCA is still the agreement that we have for trade with Canada and Mexico,” he said, and added that many Vermont-traded goods meet the compliance thresholds. Still, he said, “uncertainty is the big issue,” and that proposed tariff actions have caused some firms to pause expansion plans. - Small‑business assistance: The agency has posted a resource page and is referring companies to customs brokers, the U.S. Commercial Service, Small Business Development Centers and the Small Business Administration. Tierney named a Vermont-based customs broker, Anne Derringer, as organizing a tariff team and running webinars; he also cited industry association webinars (for example, a Vermont Outdoor Business Association event) as local supports. - Foreign‑trade zones and bonded warehouses: Tierney said the agency and regional development partners are exploring reactivating or expanding two foreign‑trade zones (earlier zones were reported around Brattleboro and in the Northeast Kingdom) and considering bonded‑warehouse arrangements at airports such as Burlington. He cautioned the federal process is complex, can be costly, and can take a year or more to set up. The department received an estimate of about $120,000 from a private firm to create a statewide plan for broader foreign‑trade‑zone coverage, Tierney said.

Committee questions and local impacts Committee members asked about tourism and retail impacts from fewer cross‑border visits. Tierney noted parts of the Northeast Kingdom and border communities historically rely heavily on Canadian visitors and said state tourism staff monitor rooms-and-meals and sales tax receipts. He also said some Quebec motorists and shoppers continue to travel to Vermont, but that a weaker Canadian dollar and fewer border crossings are factors the agency is tracking.

What happens next Tierney said he will continue outreach in Eastern Canada and will attend the SelectUSA conference in mid‑May to meet potential investors; he said the state also plans to pursue the semiconductor corridor and to continue connecting incoming companies with regional development corporations and Vermont contract manufacturers. The department is promoting available webinars and asking firms to report impacts so the state can tailor assistance.

Ending: Committee members encouraged continued outreach and coordination with regional partners and the tourism agency and noted the department’s next steps include travel to Quebec City and the SelectUSA summit to follow up on leads and bring back additional detail to the committee.