Alberta buckles up for tariffs as Trump muses about Feb. 1 changes

Alberta businesses are preparing for a battle they don't want to be caught in the middle of following the latest threat from U.S. president Donald Trump. 

After dodging tariffs for the majority of Trump's first day back in office, a reality check came late on inauguration day when the commander-in-chief returned to his narrative of imposing 25 per cent export taxes on Canadian goods.

"I think February 1st," Trump said in response to a question about whether or not he was still considering tariffs on Canada.

"Canada is a very bad abuser. They're allowing vast numbers of people to come in and fentanyl to come in."

Trump initially promised to impose tariffs on Canadian and Mexican goods on his first day in office.

He instead issued a trade memo directing federal agencies to evaluate the U.S. trade relationship with China, Canada and Mexico, according to Reuters.

Political leaders across Canada have prepared a plan that will levy immediate tariffs on $37 billion worth of American goods if Trump moves against Canada — rising to $110 billion if the president doesn't back down.

But not everyone thinks that's a good idea.

"Our businesses have made it clear that they don't want to be caught in the middle of a retaliation battle," said Ruhee Ismail-Teja, vice-president of policy and external affairs with the Calgary Chamber of Commerce.

"And we know that while we can impact the U.S.'s economy considerably because they rely on us, we're also quite a bit smaller. If we hurt them, that also hurts us."

Ismail-Teja added that small businesses are responsible for 42 per cent of Canadian exports to the United States.

Trump's musings came as a surprise to those in Alberta's business community after nearly a full day when it seemed as though the issue had taken a back seat to other priorities.

"Unpredictability is the hallmark of Donald Trump," said Carlo Dade, director of trade with the Canada West Foundation, which is based in Calgary.

"He needs to make an example of us. I think he needs not only to show us making concessions, but he needs to show that he will use tariffs."

Whether or not the U.S. president follows through on that threat, however, remains uncertain. 

"I think it obviously needs to be taken seriously, but it's quite unpredictable," said Mount Royal University political scientist Lori Williams.

"Whether the tariffs are there or being threatened, I think the strategy remains the same, trying to convey to a number of people in the United States the advantages of the trading relationship, the benefits that accrue to U.S. consumers at a time when affordability is an issue." 

Williams added that diplomacy remains the best option and the best line of defence, but that needs to be backed by something in case negotiations and conversations fail.