A century-old market closes: how one Canadian toolmaker is adapting to tariffs
At Gray Tools in Brampton, the response includes buying more Canadian materials, controlling costs, and protecting the standards customers rely on.
BRAMPTON, ON, Oct. 22, 2026 /CNW/ -- Gray Tools first established a foothold in the United States in 1917, when founder Alex Gray opened a branch in Buffalo, New York. More than a century later, the Canadian manufacturer says tariffs have halted its American sales of Canadian-made tools.
"Once the 50% tariff took effect, our U.S. sales of Canadian-made tools stopped," says Gary Nuttall, president of Gray Tools. "A market we've served for more than a century closed almost overnight."
For the family-owned company, which began in Toronto in 1912 and moved to Brampton in 1970, the challenge extends beyond finding buyers on the other side of the border. Tariffs also affect the materials it purchases, the imported products it sells, and the confidence of the Canadian industries its customers serve.
Asked to identify the biggest challenge, Nuttall starts with a word less concrete than a duty on an invoice, but one that reaches further into the business: uncertainty.
"Uncertainty, because we're being hit from several directions at once," he says. "The U.S. now charges a 50% tariff on the Canadian-made tools we ship there. Canada's counter-tariffs raised the cost of the American steel we used to buy, and Canada's surtax on imported steel goods raises the cost of items we bring in."
His description captures the difficult position of a manufacturer that buys materials, makes products and sells through a network of other businesses. A change at the border can affect more than one part of that operation. Responding to one pressure does not necessarily remove the others.
"The rules can change with little notice, which makes it hard to plan," Nuttall says. "Our priority is to shield our customers from as much of it as we can, for as long as we can."
Buying closer to home
One response has been to strengthen Gray Tools' commitment to sourcing raw materials within Canada.
That commitment reaches beyond where a finished tool is made. It also means looking at the materials that enter the Brampton factory, and the suppliers that help keep production moving.
"These challenges have made us even more committed to sourcing as many of our raw materials as possible from within Canada," Nuttall says. "We want to support Canadian suppliers while securing the materials we need to keep manufacturing here."
That approach does not restore the American market that Nuttall says the company has lost. It addresses another part of the problem: maintaining a dependable supply of materials needed to keep making tools in Brampton.
It also has a precedent in the company's history. In 1938, Gray Tools bought a controlling interest in Haun Drop Forge in Welland, Ont., to secure a permanent source of forgings, according to Nuttall.
The circumstances were different, but the concern remains familiar: securing the supply needed to sustain Canadian manufacturing.
For Gray Tools, Canadian manufacturing involves more than the work done on the factory floor. It also depends on the suppliers, raw materials, and purchasing decisions that make that work possible.
Uncertainty travels through the customer network
Trade disruption also reaches Gray Tools' distributor partners, and the professionals Gray Tools ultimately serves. Some are holding off on purchases until the outlook becomes clearer.
The company describes a slowdown in purchasing and investment as customers become more cautious. That hesitation, it says, carries through the distribution network and affects the pace of Gray Tools own capital projects.
It is a different kind of pressure from a tariff charged on a shipment. A manufacturer can identify the cost attached to a particular import or export. It is harder to plan around customers who delay a purchase or wait to see what happens next.
For Gray Tools, those customers include the people who maintain mines, utilities, railways, and industrial plants, Nuttall says. Their work creates demand for tools, but uncertainty elsewhere in their businesses can still influence when they decide to buy.
The company's response has two parts: managing the costs it can control, while staying ready for customers whose circumstances are changing.
Nuttall does not offer a timetable for the return of American sales. Instead, he focuses on purchasing, manufacturing, and the standards Gray Tools intends to maintain while the trade environment remains unsettled.
A history of changing the work - while maintaining the quality
Gray Tools has faced difficult periods before, with a long history of adaptation to challenges.
During the First World War, the young company developed custom-built machines for the Government of Canada's Department of Militia and Defence. One was a shot-blaster that cleaned spent brass howitzer shells so they could be reused, Nuttall says. With brass expensive, the machinery helped recover value from material already on hand.
During the Second World War, the Canadian Armed Forces became Gray Tools' largest customer. Women took factory jobs as men enlisted, changing the workforce as the company's demands shifted.
One wartime story remains unusually tangible, and stands as a testament to the long-standing quality of their tools. Nuttall recounts that a shipment of Gray Tools tools went down with the merchant ship Colomar, torpedoed off Sambro, N.S., in 1942. When salvagers recovered the wreck in 1968, they found a Gray Tools spanner wrench in the wreckage, still intact, and still usable. The wrench remains at the company's Brampton office, he says.
The Great Depression brought a different test. According to Nuttall, Gray Tools lost money for eight consecutive years, yet introduced its first combination wrench, reversible ratchet and torque wrench during that period.
Those accounts describe a business with a 114-year history of changing what it made and how it worked while facing circumstances it could not control. They don't make current pressures any easier, but they help explain why Nuttall's answers are pragmatic, focusing on the practical work of running the company while keeping it as Canadian-focused as possible.
Protecting quality while controlling costs
For customers using hand tools to maintain equipment, cost is only part of the purchasing decision. Nuttall says the company's approach to quality and warranty coverage has not changed with the tariff situation.
"We've been ISO 9001 certified since 1998, and our quality system covers every product we sell," he says. "Our warranty hasn't changed."
He traces that emphasis further back. In the 1960s, he says, a Gray Tools draftsman served on the federal committee establishing hand tool standards. The company's chief engineer aimed for tools stronger than the government's toughest requirement.
Nuttall also points to a more modest example of how the company has tried to protect customers during an economic downturn. In the recession of the early 1990s, employees found savings by reusing cartons and wrapping tools in old newspapers. The purpose, he says, was to keep price increases small and, on some tools, reduce prices.
That account is less dramatic than a wrench recovered from a shipwreck. It is closer to the everyday decisions a small manufacturer makes when it cannot control the wider economy but still has to buy materials, fill orders and manage costs.
"The approach hasn't changed: control costs, protect customers and keep making tools," Nuttall says.
Why keep making tools here?
Nuttall argues that domestic manufacturing gives Gray Tools more than a Canadian identity: it lets them respond to the specific needs of each industry it serves.
"The professionals who use Gray Tools keep Canada's mines, utilities, railways and plants running, and they need the right tool when they need it," he says. "Making tools here means we can move quickly to get them exactly what they need."
He cites an example from 1991, when the U.S. Army needed 29-millimetre combination wrenches before Desert Storm. According to Nuttall, Gray Tools made 2,000, and then shipped them to Saudi Arabia in eight days.
He also describes a bent pry bar developed for Canadian Pacific's track crews: a tool designed around a specific job rather than selected from an existing catalogue.
Both examples illustrate what he sees as the value of retaining in-house manufacturing capability. Any factory can produce a standard item, but an unusual requirement or a short deadline demands a specialized manufacturer. That capacity depends on keeping the equipment and skills available.
For this Canadian manufacturer, dealing with tariffs means making those decisions day to day, rather than waiting for a single solution. Buying more Canadian-made materials addresses one source of pressure. Cost control addresses another. Neither, on its own, reopens a market across the border.
What Nuttall does offer is a clear statement about where the company intends to keep working. "We're family-owned, and we plan to be making tools in Canada for a long time to come."
SOURCE Gray Tools
Dragos Baicoianu - [email protected]
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