B.C. business leaders are bracing for the potential economic impacts of another Donald Trump presidency in the U.S. amid a more protectionist stance from the president-elect.
Trump has promised to implement new tariffs of at least 10 per cent on all American imports, an attempt to promote made-in-America goods and boost the U.S. manufacturing sector.
“We need to be very, very concerned and take very seriously his comments about tariffs,” Jones told CBC News. “He said tariffs are his favourite word in the dictionary. That certainly should have every Canadian, every British Columbian paying attention because the U.S. is Canada’s biggest trading partner.”
Tariffs “are terrible for consumers,” Jones says. They could raise the price of certain products — including agricultural goods, petroleum products and softwood lumber — for Americans, forcing them to look elsewhere for cheaper goods.
“It would be extremely problematic for the economy right across the country, including British Columbia,” Jones says.
David Frum, staff writer at The Atlantic and a speech writer for former president George W. Bush, believes Donald Trump could ‘mess up’ the Canada-U.S.-Mexico free trade agreement and hold those countries ‘to ransom’ in order to get what he wants. He also suggests Trump could cut of weapons to Ukraine and cost it the war against Russia.
A report released last month from the Canadian Chamber of Commerce found that a 10 per cent tariff would shrink the Canadian economy, resulting in around $30 billion per year in economic costs.
More than 77 percent of Canadian exports go to the U.S., valued at at least $650 billion in 2023.
American economists have also warned Trump’s plan could cause inflation and possibly a recession, which could have ripple effects in Canada.
Jones says it’s imperative that governments, business leaders and lobby groups present a “Team Canada” united approach in negotiating with the U.S. for an exemption to any new tariffs.
For example, Jones says 45 of the U.S. states rely on Canada as their top market for exports.
Jimmy Jean, chief economist for Desjardins, says U.S. president-elect Donald Trump’s plan for across-the-board tariffs on imports could spark a trade dispute and disrupt the Canadian economy.
Werner Antweiler, the research chair in international trade policy at UBC’s Sauder School of Business, suspects much of what Trump said about tariffs on the campaign trail amounts to “political grandstanding.”
“What is said on the campaign trail isn’t necessarily going to be put into practice.”
Antweiler says it’s unlikely any changes to tariffs will take place before 2026, which is when the Canada-United States-Mexico Agreement — first signed in 2020 — is up for review.
“As we know, Donald Trump is very transactional,” Antweiler says. His strategy appears to be putting up the threat of 10 per cent tariffs as a starting point in the bargaining, he says.
“There’s every reason to think the negotiations around the Canada-United States Mexico Agreement will lead to some very difficult negotiations,” he says.
In a statement on X Wednesday morning, Premier David Eby congratulated Trump, saying: “British Columbians are close neighbours with family, relationships and businesses on both sides. Looking forward to working collaboratively on our shared priorities.”
In August, President Joe Biden announced the U.S. would nearly double the duty it charges on softwood lumber from eight per cent to 14.5 per cent. It’s unclear whether those tariffs would change under a Trump presidency.
Jones says B.C.’s forestry industry has already been struggling with mill closures and the resulting job losses in forestry-reliant communities.
“We need to go on the offensive when it comes to softwood lumber. We’re already in terrible shape on the softwood lumber file, and anything that makes that worse … it is really, really struggling.”