BNNTheClose:AnticipatingTrump’stariffthreats
In this segment, Stephen Johnston discusses the implications of former President Trump’s anticipated return to office and his renewed threats to impose broad tariffs on Canadian exports. Johnston warns that major industries—especially automotive, steel, aluminum, and other exports—could be significantly impacted if tariffs in the range of 25% to 35% come into force. He emphasizes that, while markets haven’t yet reacted sharply, investors should already be pricing in the elevated risk.
Johnston argues that Trump views tariffs not simply as trade tools but as leverage to extract concessions on broader issues like illegal immigration and drug smuggling. He notes that the threats are strategic bargaining positions, even if they might be softened later through exemptions—particularly those tied to the USMCA framework
On policy and economic fallout, Johnston highlights that such tariffs could escalate into a prolonged trade conflict with Canada and Mexico. While this would add uncertainty for exporters and put upward pressure on consumer prices, he suggests that the Federal Reserve may choose to maintain current interest rates rather than react preemptively to trade-induced inflation (though that reference speaks generally to trade risk pressure influencing Fed decisions).
Overall, Johnston sees Trump's tariff stance as a high-stakes diplomatic negotiation tool—one that markets are aware of but have yet to fully internalize, meaning potential volatility could be ahead if threats evolve into actual policy.
Watch full interview here