BC Escalates Trade Battle as US Tariffs Loom, but Critics Warn of Economic Fallout

As British Columbia prepares for the fallout from potential US tariffs, Premier David Eby’s government has unveiled a series of countermeasures aimed at protecting provincial workers and businesses. However, critics warn that BC’s response—ranging from economic stimulus measures to a controversial pause on US alcohol imports—may carry unintended consequences, while concerns persist over the province’s long-term strategy.

The Looming Trade Crisis

The latest trade tensions stem from the United States’ proposed tariffs on Canadian goods, including a 25 percent levy on most imports and a 10 percent tariff on energy. While US President Donald Trump has paused their implementation until March 4, uncertainty over future trade relations remains high.

BC is particularly vulnerable, as 54 percent of its exports go to the US, with industries such as forestry, mining, and energy deeply reliant on American markets. A preliminary assessment by the provincial government estimates that these tariffs could cost the BC economy $69 billion between 2025 and 2028 and eliminate over 120,000 jobs.

“These tariffs represent an unprecedented economic assault,” said Eby. “We won’t back down or be bullied.”

BC’s Response

In response, the government has established a war room-style cabinet committee to coordinate its trade strategy, chaired by Housing Minister Ravi Kahlon. The committee’s mandate includes retaliatory economic measures, outreach to American decision-makers, and the acceleration of private-sector projects to boost domestic job growth. The province has also launched a Trade and Economic Security Task Force comprising industry leaders to advise on trade diversification and economic resilience.

The government’s immediate actions include:

• A directive to halt purchases of US liquor from Republican-led states by the BC Liquor Distribution Branch.

• A shift in procurement policies to prioritize Canadian-made goods for government contracts and Crown corporations.

• Fast-tracking 18 major mining, energy, and clean-power projects worth an estimated $20 billion to stimulate the economy.

• However, critics argue that these measures—particularly the alcohol ban and fast-tracking of resource projects—could backfire.

Industry leaders have warned that cutting US liquor imports could hurt BC businesses just as much as American producers. The Alliance of Beverage Licensees (ABLE BC) estimates that BC imports $400 million in US liquor annually, with many local bars and retailers relying on American brands.

Jeff Guignard, executive director of the Alliance of Beverage Licensees (ABLE BC), expressed concern that while halting US liquor imports might impact American producers, it could also harm BC businesses that depend on those products to serve their customers. In an interview with Global News he noted that such a move could have unintended consequences, affecting local businesses just as much as those across the border.

Additionally, the province’s plan to fast-track resource projects has drawn pushback from indigenous groups and environmental advocates. Some First Nations leaders in BC and Alaska have raised concerns over accelerated approvals for the Eskay Creek and Red Chris mines, while environmental groups have criticized the inclusion of the Cedar LNG project.

Forestry

The forestry sector, already struggling under existing US tariffs on softwood lumber, faces potentially devastating consequences if new duties are imposed. The US currently levies a 14.4 percent duty on BC lumber, and an additional 25 percent tariff could lead to widespread mill closures and layoffs. Industry analysts have urged the provincial government to implement tax breaks and streamline regulatory processes to ease the burden on producers.

David Elstone, managing director of Spar Tree Group, argued in a Business in Vancouver opinion piece that while the BC government recently provided a 36 percent tax credit to the film industry to support its recovery, the forestry sector—one of the province’s key economic drivers—faces a far greater threat from US tariffs. He suggested that similar relief should be extended to forestry businesses, including contractors and manufacturers, to help them withstand the economic challenges posed by the potential trade dispute.

Experts also warn that Canada’s ongoing trade disputes with the US have historically ended in costly legal battles rather than swift resolutions. While BC has prevailed in many past softwood lumber disputes under NAFTA and WTO rulings, the US continues to use domestic trade laws to impose tariffs, often ignoring international rulings.

Is BC’s Plan Sustainable?

The provincial government insists that its three-point strategy—retaliatory measures, economic stimulus, and trade diversification—will mitigate long-term damage. However, some analysts question whether these actions are a genuine long-term strategy or a reactionary stopgap.

BC’s economy is deeply integrated with the US, with 76 percent of exports serving as inputs for American industries. Cutting trade ties abruptly could be risky, particularly in sectors like energy and manufacturing, where cross-border supply chains are essential.

Moreover, while the BC government’s approach has been aggressive, it remains unclear how much influence a provincial government can exert over US trade policy. Washington’s decisions will ultimately be dictated by federal interests, and analysts say that high-level diplomacy—rather than economic retaliation—may be more effective in averting a prolonged trade conflict.

As BC braces for potential economic turbulence, the government’s approach reflects both urgency and political maneuvering. While Eby’s administration says it is taking decisive action, the broader economic consequences remain uncertain. Critics argue that BC may be engaging in economic brinkmanship without a clear long-term strategy, while supporters say the province is standing up for Canadian workers and businesses.