President Trump’s tariff and trade policies dominated the world’s political discourse through 2025. In a recent article,Stuart Trew and I reviewed the different tariffs and overall state of play for Canada. This post takes a closer look at the latest numbers on BC exports and the BC government’s response so far. While the initial shock wave has passed, we can start to see some of the results, although there’s still a lot of uncertainty heading into 2026.
The good news is that the BC economy has been fairly resilient through 2025. As of November 2025, the provincial unemployment rate sits at 6.5 per cent and employment growth has been sluggish but positive with 1.4 per cent more jobs than a year earlier. Reduced population growth to near zero due to immigration restrictions is also a factor that is also slowing the economy relative to past years.
A key lesson from 2025 for BC’s diverse trade mix in terms of export markets and commodities has provided some degree of resilience in the face of the Trump tariffs. However, the BC government’s current industrial strategy to counter the US tariffs is misguided. With a massive stockpile of resources, BC is seeking to bypass regulatory reviews to advance environmentally-destructive oil and gas and mining projects, climate action be damned.
BC trade in context
In 2024, BC’s merchandise exports totalled $54.7 billion, equivalent to 13 per cent of BC’s $429 billion GDP, compared to 24 per cent for Canada as a whole. However, international trade cuts both ways and if we consider imports, BC’s net position on international trade in 2024 was almost $20 billion in deficit, whereas for Canada as a whole imports and exports were roughly in balance.
The annual value of BC’s exports is a function of both quantities and prices, often with major fluctuations from year to year due to changes in external demand and commodity prices. For example, BC’s exports were down some 16 per cent in 2024 compared to 2022, the all-time record year for exports due to very high commodity prices that year (related to the economic rebound out of COVID-19).
While the United States is the destination for three quarters of Canada’s exports, BC has a more diversified dance card. Just over half (53 per cent) of BC exports in 2024 went to the United States, while two fifths (39 per cent) went to Asia (Table 1). China is BC‘s largest export market after the United States, followed by Japan and South Korea, plus a smaller share to India. While there is potential in expanded BC trade with Europe, currently only 4 per cent of exports are to Europe, mostly to the United Kingdom and Germany.
BC trade resilience can also be attributed to a broader export commodity mix, dominated by forestry, agricultural and seafood products, as well as mining and oil and gas. Each of these is a classic “staples” resource industry that supports local supply chains, while expenditures from workers support jobs in local businesses. BC has several regional staples making the province as a whole less dependent on any particular commodity. This provides some insulation from swings in commodity prices and external shocks.
The Trump tariffs
The Trump tariffs have had both direct effects on certain Canadian export sectors and indirect effects through their impacts on Canada’s trade partners and the global economy. All of this adds a thicker layer of uncertainty to decision making, which undermines business investment. Canada has relatively been insulated from direct impacts of new tariffs with a large share of exports still duty free if they comply with the Canada US Mexico Agreement (CUSMA).
The main adverse impacts have resulted from sectoral tariffs aimed at Canadian manufacturing industries, notably steel, aluminum and automobiles, while antidumping and countervailing duties are also affecting the forestry sector. In another recent article, Stuart Trew and I look at the mounting job losses and the need for more aggressive industrial policies in all affected areas. BC does not manufacture automobiles or steel, the two sectors have been hit hardest by the tariffs, but for aluminum production, tariffs of 50 per cent affect the Rio Tinto BC Works smelter in Kitimat.
Forest products were tagged with a sectoral tariff of 10 per cent in October 2025, on top of new anti-dumping and countervailing tariffs on softwood lumber, announced in July. The Trump administration tripled the anti-dumping rate on Canadian softwood lumber in late July (to 20.56 per cent), then revised the countervailing duty rate to 14.63 per cent in August. This has put tremendous pressure on an industry
Even before Trump, Canadian lumber exports have long faced significant anti-dumping and countervailing duties from the United States. Under WTO and CUSMA rules, countries may impose tariffs/duties on imports of goods sold into their domestic market at below-market prices (anti-dumping duties) or that benefited from subsidies (countervailing duties). The U.S. measures stem from allegations that stumpage rates on Crown land are too low and therefore an unfair subsidy for Canadian exports—an argument rejected by a World Trade Organization dispute panel in 2020.
That said, it’s difficult to disentangle the impact of tariffs from overall adverse trends in the BC forest industry, many mill closures and curtailments in recent years. BC’s forestry exports to the U.S. have been adversely affected by a major downturn in housing construction. Moreover, BC’s overall timber harvest has been in long-term decline, falling a staggering 45 per cent from 69 to 39 million cubic metres between 2015 and 2023. Softwood lumber export volumes fell in line with that trend. Some of this is also related to BC running low on old growth stands in easily accessible locations, which are more profitable.
Export impacts in 2025
The latest BC Stats data up to August 2025 show that BC‘s overall exports to the United States have held up reasonably well, with export values actually slightly higher (up 1.2 per cent) on a year-to-date basis than the same period in 2024 (Table 1). However, this largely reflects front-end loading of exports ahead of the tariffs. When we look at the monthly data, there is more of a notable decline in exports to the US, which were down 6.4 per cent in August 2025 compared to August 2024.
BC forestry exports are among the most exposed to the U.S. market, with about three-quarters of forestry exports headed south. Exports of softwood lumber were down 26 per cent in August 2025 compared to August 2024, although only down 2.6 per cent on a year-to-date basis. Pulp and paper exports were also down nine per cent on a year-to-date basis compared to 2024.
In aluminum, there has not been a major curtailment of production or job losses, with the company reporting production about three per cent lower than 2024 over the first three quarters of 2025. While some 80 per cent of BC production was exported to the U.S. last year, the U.S. does not have domestic production that can step into the breach. Aluminum production is reliant on low cost electricity, which Rio Tinto has in abundance in Kitimat, so it is hard to displace mills south of the border. The Kitimat smelter also completed a $6 billion upgrade in 2016.
The U.S. tariffs have driven the price of aluminum way up in the United States compared to other markets, making it possible for Canadian producers to absorb some of the cost of the U.S. tariffs and remain competitive. As a result, the value of BC’s aluminum exports has diminished 29 per cent in 2025 on a year-to-date basis, while jobs have not been affected. Time will tell whether this pattern can hold.
BC exports to the rest of the world also shrunk somewhat through 2025 (Table 1). On a year-to-date basis, BC exports to the rest of the world (excluding the United States) were down 2.5 per cent, while August 2025 was down only 1.4 per cent compared to a year earlier. This likely reflects the overall slowdown in 2025 arising from the shock of U.S. tariffs.
A bright spot is exports to China, which are up 26 per cent on a year-to-date basis, and in August were 46 per cent larger than a year earlier. However, China is also in a trade dispute with Canada, and imposed tariffs earlier in 2025 on selected agricultural and seafood products as retaliation for 100 per cent Canadian tariffs on Chinese electric vehicles announced in summer 2024 (Canada was following the US lead on Biden administration tariffs).
Ultimately, there’s no easy transition away from export losses in the United States. Asian countries currently look to Canada for a different set of products to import. For example, China and Japan largely import copper, coal, lumber and food products. Expanding trade on a sustained basis will take some time, especially in light of the heavy emphasis on raw materials in BC’s export mix.
BC’s response
At the provincial level, BC has done little in response to the Trump tariffs, apart from removing U.S. liquor off the shelves of BC stores. BC also floated a proposal to tax American trucks passing through BC to Alaska but this has not been implemented. Instead, Trump’s tariffs have largely been used to justify fast-tracking a list of mining and liquefied natural gas (LNG) export projects by cutting requirements for environmental assessment and other public reviews.
To make these happen, BC Hydro will need big new investments in electricity transmission and generation capacity. This will likely be a major pathway for BC to subsidize, through low electricity prices, the industrial projects that are creating new demand, as the costs of new infrastructure will be amortized through higher rates across all customer classes. In contrast, the previous Liberal government policy was for LNG facilities to pay the full marginal cost of power they required.
The federal government is onside with this plan, with megaprojects LNG Canada Phase 2, Ksi Lisims LNG and the North Coast Transmission Line all assigned to the new Major Projects Office for fast tracking. As in the BC case, this is mostly optics: the hold up is the need for a private sector final investment decision, not BC or federal approvals.
The BC government seemed hopeful that all of this economic activity would mute pressures from Alberta for a new bitumen pipeline to the coast. However, the recent Canada-Alberta Memorandum of Understanding has put a much-opposed northern bitumen pipeline back on the table. In the short term, there is no private sector proponent at the moment willing to drop tens of billions on a new pipeline, though the Alberta government itself could step in (as the Government of Canada did for TMX). I review the terms of the MOU in this piece.
In early August, the federal government announced a package of support measures for the forestry industry, including $700 million in loan guarantees, $500 million towards diversification and value-added production, and $50 million in income and other retraining support for workers. How much of this will flow to BC is not clear. A new Forest Sector Transformation Task Force has also been announced and could provide a model for change if workers and their unions are at the table.
The economic hit from tariffs and broader uncertainty has been mitigated by federal and provincial fiscal policy. The large BC deficits the right loves to hate are propping up the economy and preventing a recession. Both federal and provincial governments have excellent fiscal capacity to run deficits in the short-term to respond to trade threats.
While 2026 will bring new challenges for BC, the current trade situation also highlights structural challenges facing the province. There is a window for new industrial and sectoral policies, and a more “elbows up” approach. Unfortunately, BC’s misguided push for resource megaprojects threatens to move the province in the wrong direction.
