A sidewinder tug moves logs outside of the Western Forest Products (WFP) sawmill in Ladysmith, B.C., in March, 2025.James MacDonald/The Globe and Mail
The Trump administration’s proposed tariffs threaten to deliver a harsh blow to British Columbia’s economy, hitting a variety of Western Canada manufacturers during this latest phase of the lengthy trade war.
The Section 338 tariffs – announced Monday evening and set to take effect Aug. 19 – would apply to roughly US$20-billion of imports from Canada, or roughly 5 per cent of Canada’s shipments to the U.S. in 2025.
If enacted, the new tariffs would apply to nearly 14 per cent of what B.C. shipped to the U.S. in 2025 – the highest concentration of any province, according to a Globe and Mail analysis of trade data. Quebec and Ontario follow at 10.8 per cent and 9 per cent, respectively.
Electrical machinery and equipment, along with wood and wood products, are where B.C. is particularly exposed to this tranche of tariffs.
Since last year, the U.S. has imposed duties on key industrial sectors – including steel, aluminum and automobiles – which has slammed manufacturing bases in Ontario and Quebec. In dollar terms, those provinces face the heaviest exposure to this latest round of duties, because they are much larger economies.
Still, the Section 338 tariffs are set to impose a significant toll on B.C.’s industrial base – in large part, because these latest tariffs will not include an exemption for goods trading under the United States-Mexico-Canada Agreement.
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The duties are set to hit more than 500 product categories, including everything from electrical panels and TV cameras to refined lead and plywood in B.C.
“That’s kind of the focus of our of our non-resource manufacturing. It’s manufacturing machinery, equipment, and tools for industrial uses,” Jairo Yunis, the Business Council of British Columbia’s director of policy, said.
“And now they’re tariffing it, and that’s why – combined with the wood products and paper products – we’re gonna be disproportionately hit by these new tariffs if they end up taking effect.”
At the other end of the spectrum, less than 1 per cent of Alberta and Saskatchewan’s U.S. exports would be affected by the new tariffs, largely due to Mr. Trump bypassing critical export industries such as energy, potash and critical minerals.
Trevor Tombe, an economics professor at University of Calgary, said tariffs on goods such as wine, toys and textiles from Canada would disrupt the U.S. economy less than if they were on potash or energy products.
U.S. President Donald Trump's latest threat to impose 50 per cent tariffs on a wide swath of Canadian goods is more narrowly targeted than first feared, argues Royce Mendes, head of macro strategy at Desjardins. He sees the new tariffs as part of an intensifying negotiations strategy ahead of U.S. midterm elections in the fall.
The Canadian Press
Some economists also believe these sectors were selected because U.S. importers can switch with relative ease to domestic suppliers.
Laura Gu, senior economist at Desjardins Securities, said some provinces are just better positioned to face the tariffs.
To date, B.C. has been relatively well-insulated from the trade war, and among the major provinces, it has the most diversified export sector. Roughly half of B.C.’s goods exports went to the U.S. in 2025, compared to more than 75 per cent for Ontario.
However, B.C. is at particular risk with the new Section 338 tariffs as the list includes a range of value-added wood, pulp, paper and packaging products.
B.C.’s forestry sector has already struggled from the longstanding dispute with the U.S. over softwood lumber. Last year’s Section 232 tariffs imposed a 10 per cent levy to softwood lumber, which had already been facing 35 per cent anti-dumping and countervailing duties. Together, softwood lumber faces a cumulative levy of 45 per cent, and now the new tariffs risk causing further disruption overall.
About 20 per cent of B.C.’s exports are from the forestry sector, with 60 per cent of those going to the U.S.
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The Forest Products Association of Canada, which represents the country’s wood, pulp, and paper producers, said they are “disappointed by the proposed expansion of U.S. tariffs.”
“At a time when our American neighbours are struggling with affordability and the need to build more homes, these actions will unfortunately hurt them too,” the association wrote in a statement.
Quebec will also be especially vulnerable to new tariffs targeting paper and paperboard products.
B.C.’s industrial machinery, electronic and electrical equipment and parts exports make up 11 per cent of the province’s total exports, but nearly three-quarters of that goes to the U.S., making the industry much more sensitive to the new tariffs.
“These sectors are particularly dependent on the U.S. market,” the Business Council’s Mr. Yunis said.
With a report from Jason Kirby