The BC government is establishing a new cabinet committee to coordinate its response to US tariff threats, as concerns mount over potential economic fallout from proposed trade restrictions.

Premier David Eby announced the committee Tuesday, saying it will serve as a “war room” to protect BC workers, businesses and the economy. Housing and Municipal Affairs Minister Ravi Kahlon will chair the group, which includes key ministers from economic, trade, and resource sectors.

Eby framed the tariffs as a political challenge tied to the current US administration.

“This threat isn’t going away anytime soon–not while this president is in power,” he said.

The announcement comes amid rising tensions over trade, as a new report from the Centre for Future Work disputes US claims that Canada is benefiting unfairly from the bilateral trade relationship. The report warns that escalating trade measures—including proposed 25 percent tariffs on Canadian imports—could significantly harm industries on both sides of the border.

Concerns over trade impact

The report, authored by economist Jim Stanford, argues that Canada is the largest buyer of US goods and services, purchasing $440 billion (USD) in 2023—more than any other country, including China and Mexico. It also highlights that while the US runs a $40-billion bilateral trade deficit with Canada, this figure ranks only tenth among its trading partners and represents just five percent of America’s total trade deficit.

Moreover, the report challenges the claim that the US is “subsidizing” Canada, pointing out that America enjoys substantial trade advantages in services and investment income. The US has a $31.7-billion (USD) surplus in services trade with Canada, particularly in digital platforms, data services, and tourism. Additionally, American investors earn more from Canadian holdings than vice versa, creating a net surplus of $13 billion (CAD) in investment income.

Despite these findings, BC officials say they are preparing for potential economic disruptions. The new committee will work to protect key industries, strengthen the provincial economy, and explore diversification strategies to reduce reliance on US markets.

Supply chain risks and economic fallout

BC’s economy is particularly vulnerable to trade disputes due to its reliance on natural resources, energy exports, and cross-border supply chains. The Centre for Future Work report warns that disrupting these connections could increase costs for US manufacturers, as 76 percent of Canadian exports to the US serve as inputs for American industries.

The impact would be especially severe in automotive manufacturing, where parts often cross the border multiple times before assembly. The report also notes that Canada supplies a significant portion of US crude oil imports, with energy exports to the US valued at $170 billion (USD) in 2023. A trade dispute affecting the energy sector could drive up costs for American consumers while damaging Canada’s resource-based economy.

The proposed tariffs could also have ripple effects in border states that rely on Canadian trade, raising concerns among US business leaders. Critics argue that increasing tariffs on Canadian imports could exacerbate inflationary pressures in the US, making American-made goods less competitive on the global market.

BC’s response amid uncertainty

While the BC government insists that the new committee will take swift and decisive action, questions remain over how effective its response will be in countering decisions made in Washington. The province’s three-point plan involves: Retaliatory measures and outreach to US decision-makers, economic stimulus through expedited projects and industry support, and trade diversification to reduce reliance on American markets.

Kahlon, who will lead the committee, says the province is prepared to push back. “We didn’t ask for this fight, but BC will not be bullied,” he said. “My colleagues and I will work shoulder to shoulder with workers, business and community leaders to meet this moment.”