As Canadian leaders respond to tariffs from the United States, one B.C. economist warns of an escalating trade war, while another still holds out hope American lawmakers will push back against the "economic pandemonium" U.S. President Donald Trump has unleashed.
Ulrich Paschen, who teaches at Kwantlen Polytechnic University's Melville School of Business, said Trump's decision not impose reciprocal tariffs on Canada as part of the so-called Liberation Day announcement does not change Canada's exposure.
"(All) previous tariffs and measures remain in place," Paschen said.
These include the newly announced 25 per cent tariff on the auto industry and existing tariffs on aluminum, steel and products that do not comply with the Canada-United States-Mexico Agreement.
"While it is seen as positive that no additional tariffs were levied, the existing ones would already be considered outsized under normal circumstances," Paschen said.
Canada has since responded with 25 per cent tariffs on automobiles that do not comply with CUSMA.
"Canada's response is as expected, which brings with it the distinct possibility of an escalating 'vicious cycle' of trade actions," Paschen said.
Werner Antweiler, associate professor at the University of British Columbia's Sauder School of Business, said the economic damage in BC will be limited to exposed industries. They include aluminum producer Rio Tinto in Kitimat and what Antweiler called the "ever-ailing forestry sector". the latter is currently subject to countervailing and anti-dumping duties, which remain at risk of going up.
"Consumers in B.C. will face some higher import prices due to Canada鈥檚 retaliatory tariffs, but this is still rather limited," Antweiler.
Premier David Eby said Thursday B.C. is considering additional non-tariff responses, with government planning the use of Bill 7 to bring them into effect.
Paschen said Trump's announcement has little impact on the options available to the provincial government.
"Canada as a country is already in a lower power position in this trade conflict and B.C. as a part of Canada has few options, none of them particularly attractive or powerful."
Antweiler, meanwhile, pointed to the parts of Bill 7 that address interprovincial trade.
"The most important feature (of Bill 7) is the ability to remove internal trade barriers," Antweiler said. "Working on removing these barriers and promoting intra-Canada trade is going to be the most important tool in the short-term to help the B.C. economy."
Various voices described Trump's previous tariff policies as an attack on the global trading order established after 1945. Trump's subsequent escalation has intensified those voices.
Paschen said the damage caused by Trump "is very likely irreversible" and can only be softened by trade within Canada or with favoured nations.
"Most of the reasoning given by the U.S. is incoherent and contradictory, so a likely conclusion is that President Trump seems to be intent on dissolving the current global economic order," Paschen said. "If that aim persists, we're in for a fundamentally different world of commerce and politics."
Antweiler struck a more optimistic tone. He said there is "ample scope to return to a rules-based trading system" provided "the United States is willing to return to economic sanity."
He added federal Liberal leader Mark Carney and his Conservative counterpart Pierre Poilievre are open to discuss CUSMA, which is up for renewal in July 2026.
"However, it is difficult to envision what may bring (Trump) to the realization that his tariff policies are a failure," Antweiler said. "Ultimately, these policies will harm many ordinary Americans by way of higher prices, job losses and reduced economic growth."
Perhaps the U.S. will have "suffer significant harm" before Republicans start to "claw back powers" from Trump, who has usurped them through his reliance on emergency legislation, Antweiler added.
"As the recent vote in the U.S. Senate (Wednesday) has demonstrated...there is some hope that the pushback against the economic pandemonium created by Mr Trump is gaining momentum," he said.
Democratic senators joined by four Republicans passed a resolution to take away Trump's ability to impose tariffs on Canada. But the measure is expected to have no chance of passage in the House of Representatives.
