Value of Canadian dollar ‘volatile’ as communications about U.S. tariffs swirl: Vancouver economist

The wider impact of U.S. President Donald Trump’s tariffs on Canadian goods on the B.C. economy is still unknown — that is, if they are implemented at all.

The White House’s communications changed rapidly Friday, adding to the confusion. Early reports from Reuters claimed Trump was still reviewing the tariffs, which may be delayed until March, but Trump’s press secretary denied the claims of delays and confirmed that Feb. 1 was still in his sights — after originally pivoting from his promise of implementation on his first day in power.

Bryan Yu, chief economist at Central 1 Credit Union, says Canadians won’t really know the true impacts of the tariffs unless and until they happen.

“It changes by the minute, in many ways, in terms of what the potential effects could be. And there’s really no way to forecast what type of environment we’re looking at even in the next week,” said Yu.

Yu says the Canadian dollar is likely to take a significant dip in value if the tariffs do go ahead — in fact, it’s been changing every time the American president speaks on the matter, albeit showing a recovery soon after.

“Sometimes it’s moving quite a bit, so there’s absolutely volatility that’s coming through from the the currency space,” said Yu. “And markets are absorbing the information that we are seeing: weakness in the potential of the in the Canadian economy.”

He says if and when the tariffs come, Canadians should expect higher prices in stores, especially if Ottawa establishes retaliatory tariffs on American goods. Yu says the federal government may also look at reducing interest rates once again to support Canadian businesses.

B.C. Finance Minister Brenda Bailey stood by the government’s idea of counter tariffs, saying they’ll protect British Columbians’ interests.

But she adds the confusion has made it hard to figure out budget planning, with the province’s budget due in early March.

“It’s very difficult to create a budget during uncertainty,” said Bailey Friday.

Last week, David Eby announced his government’s plans to address the tariffs but said their implementation could plunge the province into a worse economic state than the 2008 recession.