It’s inauguration day in the United States and Canadian businesses and political leaders will be watching what happens south of the border intently.
Donald Trump is expected to act swiftly after his inauguration, with executive orders already prepared for his signature, which may include hefty tariffs on all Canadian goods.
The U.S. is British Columbia’s largest trading partner by far. The province exported more than $30.4 billion worth of goods south of the border in 2023. That’s more than half of all merchandise exports.
“Right now we are experiencing an uncertainty shock, so it’s tough for businesses to plan based on different scenarios. We don’t know what’s going to happen. We don’t know if it’s going to be a gradual approach to tariffs, if they are going to be implemented at all,” said Jario Yunis, of the Business Council of British Columbia.
Exports to the U.S. account for seven per cent of B.C.‘s economy and American demand for B.C. goods helps support more than 136,000 jobs.
Donald Trump has threatened to impose a 25 per cent tariff on all Canadian and Mexican goods.
At first, his threat was tied to what he said was inaction to keep migrants and illegal drugs out of the U.S.
The Liberal government then laid out a $1.3 billion plan to beef up the border and Trump has since pivoted to say the tariffs are due to America’s trade deficit with Canada.
The natural resource sector is expected to be hit the hardest by potential tariffs. Energy, forestry, metals, and agriculture and fishing products make up 69 per cent of B.C.’s exports to the U.S.
“Trade, however, is a two-way street. American consumers and businesses would also face impacts from new tariffs—a critical point we must continue to emphasize. Trade offers no win-lose scenarios, only opportunities for mutual benefit or shared loss,” said Yunis.
The Business Council of British Columbia is calling for a “Team Canada” approach to strengthen Canada’s trade relationship with the U.S. It says the focus needs to be on reassuring Americans that Canada is a reliable neighbour while highlighting the potential economic risks and mutual losses that could arise if tariffs are introduced.
The council is also emphasizing the need to address domestic challenges like regulatory inefficiencies and investment barriers to enhance B.C.’s competitiveness and mitigate the negative impact of potential trade disruptions.
The inauguration ceremony is being moved indoors due to a cold snap so many Canadian officials will be packing tightly into the Canadian embassy to witness Trump take power.
Prime Minister Justin Trudeau will not be in attendance, but Industry Minister Francois-Philippe Champagne, Trade Minister Mary Ng, Newfoundland and Labrador Premier Andrew Furey and Alberta Premier Danielle Smith will be there.
The Trudeau government has prepared several response plans, which could include billions of dollars in retaliatory tariffs.
With files from The Canadian Press
