With Donald Trump being sworn back in as the US President, his administration has proposed a sweeping 25% tariff on all Canadian imports.
While a date hasn’t been set for the tariff, there are reports that it could take effect on February 1st. This policy threatens to disrupt economic ties between Canada and its largest trading partner, with significant ramifications for BC and the rest of the country.
To understand the potential consequences, it’s important to first examine what tariffs are and how they function.
A tariff is essentially a tax imposed on imported goods, designed to make foreign products more expensive for consumers. The added cost is usually passed on to buyers, raising the overall price of imported goods and services.
While tariffs are often intended to protect domestic industries by encouraging consumers to buy local products, they can also lead to higher prices, reduced trade, and retaliatory measures between nations.
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The economic implications for BC could be severe if a tariff is implemented.
A preliminary assessment conducted by the provincial government estimates a cumulative loss of $69 billion in economic activity between 2025 and 2028 if these tariffs are enacted.
The province’s real GDP could shrink by 0.6% in both 2025 and 2026, while corporate profits might decline by $3.6 billion to $6.1 billion annually. This economic downturn would likely result in the loss of 124,000 jobs by 2028, with the hardest-hit sectors being natural-resource exports, manufacturing, transportation, and retail.
The unemployment rate could rise to 6.7% in 2025 and 7.1% in 2026, creating additional challenges for the province’s economy.
Tariffs would also affect government revenues, which could decrease by $1.6 billion to $2.5 billion annually due to lower personal and corporate income tax collections. This loss of revenue would make it more difficult for BC to fund essential public services such as healthcare and education.
The US is Canada’s largest trading partner, accounting for 54.2% of exports. However, Canada also relies on other trading partners, with Asia contributing 35.4% of exports and other regions making up the remaining 10.4%.
While this diversification offers some resilience, a trade war with the US would disproportionately impact industries reliant on cross-border trade.
To address this looming crisis, Premier David Eby and the provincial government have outlined a three-part strategy.
First, BC is preparing contingency plans and is ready to participate in nationally coordinated retaliation, including targeted tariffs and embargos.
Second, the province aims to strengthen its domestic economy by fostering high-paying jobs and streamlining business processes, such as fast-tracking permits and reducing trade barriers between provinces. Finally, BC is focusing on diversifying its trade relationships, particularly in the Asia-Pacific region, to reduce dependence on US exports.
Premier Eby has stressed the gravity of the situation, saying, “For our province, the tariffs mean potentially the loss of tens of billions of dollars; more than 100,000 jobs. It is a big deal for British Columbia.”
The provincial government is also working closely with the federal government and other provinces to develop a unified response. In February, Premier Eby and other Canadian leaders will travel to Washington, DC, to advocate against these proposed tariffs and highlight the mutual harm they could inflict on both nations.
In 2019, the Bank of Canada projected that a 25% tariff could have an economic impact greater than most previous recessions. While the full effects remain uncertain, the province’s proactive measures aim to mitigate the damage and ensure the resilience of BC’s economy.
In a recent press conference, Eby urged British Columbians to reconsider travel to the United States and the purchase of American goods as the province assembles a task force to address US President Donald Trump’s proposed tariffs.
An official date on when a tariff will be implemented has yet to be announced.
