After 142 years in the business of milling and packaging rice and rice flour, Dainty Foods was on a roll.

A surge in demand for precooked and flavored rice made for microwaving had suddenly lifted the fortunes of Canada’s only rice mill.

The company was already modernizing its factory in Windsor, Ontario, and had plans to build a new plant across the border in Detroit to meet demand from U.S. customers.

Now, all that’s been upended and the company’s very existence is in question.

Dainty Foods’ dire outlook reflects a broader fallout from the trade war that has erupted between Canada and the United States. President Trump’s on-again, off-again tariff measures and Canada’s retaliatory strikes are inflicting deep wounds on Canadian small- and medium-sized businesses, which now face escalating costs to move goods back and forth across the border.

Dainty Foods must pay 25 percent more to import rice from the United States and faces the prospect of paying higher costs to export products to America if Mr. Trump follows through on more tariff threats.