‘It seems like Trump is digging in’: Alberta economist warns of tariffs raising unemployment and prices

Chief economist predicts that the U.S. tariffs could halt Alberta's 2.5% economic growth, potentially raising unemployment and causing job losses.

Chief economist for ATB, Mark Parsons, joined CTV Morning Live’s Kent Morrison to discuss the impact of new U.S. tariffs on Alberta’s economy.

This transcript has been edited for length and clarity.

Kent Morrison: We had you in earlier when we thought these tariffs were coming a month ago, and we talked about different scenarios that could come out of this. Is this the worst case scenario now?

Mark Parsons: It’s right up there. We thought that this could happen, and now it’s become a reality. At one point, we were thinking 25 per cent across the board, we were looking at 10 per cent energy and 25 per cent on other goods. That softens the blow in Alberta a little bit, but it’s still very significant. I think what we realized this morning is that this is happening. It could last longer than we previously thought. It seems like Trump is digging in.

Kent: Do you have any idea how long this could last?

Mark: No indications to date. The scenario we laid out is about through the rest of this year and into next year. In that case, that will essentially wipe out the growth that we’re expecting for the Alberta economy. We have the economy growing around two-and-a-half per cent, now we’re looking at maybe half per cent, unemployment going up and some job losses. So this is not a good day.

Kent: What would your message be for people in their everyday lives?

Mark: I think we’ll just have to buckle up for a little bit. We should see prices going up. If there’s a silver lining to this right now, I think there’s more urgency than ever before on getting things done here in Canada. Tearing down these interprovincial trade barriers, getting major projects built, and diversifying into new markets? That can offset some of the damage, and we can’t lose sight of that. I think Canadians are coming together and saying, “Hey, what can we do at home?”

Kent: Is there a real potential that long-lasting trade partnerships with the United States will be gone going forward in the future?

Mark: We rely so much on them, and they rely on us. It’s mutually beneficial. I think cooler heads will prevail at some point. What I’m watching right now is the damage it inflicts on the U.S. economy. They have an inflation problem right now. They’re at 3 percent and tariffs aren’t going to help with that. I think what’s going to play out is there is going to be some damage to the U.S. economy and prices. I think the stock market will continue to decline in this situation, and that’s something Trump takes notice of. I don’t see him watching that happen for a very long period of time before he reverses course.

Kent: What would your advice be for people who have investments that are watching that closely as the markets dive this morning, do you have anything to calm some nerves?

Mark: I think right now, we’re just going to have to see what happens. We’ve already seen the market adjust a little bit. Quite frankly, I’m surprised it hasn’t moved more, because it seems like the markets are pricing in that this might not last forever. So, if they are temporary, we could actually see some things going the other way, but I wouldn’t make any rash decisions right now. I think now is the time to just have that diversified portfolio and make sure that you’re not overly exposed.