Transpacific trade winds could soon start blowing a lot of bad weather B.C.’s way.
China’s decision to halt canola imports from Winnipeg’s Richardson International Ltd. is an early storm warning.
Its ongoing trade skirmishes with the U.S. have done much to erode business confidence in global trade. Major traders and marine cargo carriers like Maersk, the world’s largest container shipping company, have downgraded revenue and business outlooks for the year ahead because of the potential for further restrictions to global trade.
Conversely, fallout from the U.S.-China trade dispute has benefited some countries as importers seek alternative sources for products to avoid tariffs.
The United Nations Conference on Trade and Development has estimated that 82% of the US$250 billion in Chinese exports subject to U.S. tariffs will be captured by companies in other countries. It projected that Canada could land US$20 billion of that windfall.
But it noted that the other side of the trade war coin could be more tariffs instituted in more regions around the world.
For B.C. and the rest of Canada, a more immediate threat to trade is the troubling Huawei affair. What is now a diplomatic powder keg is set to ignite a serious Canada-China trade dispute from which B.C. could suffer serious long-term economic injury.
As Business in Vancouver noted recently (“B.C. exporters feel chill in Canada-China freeze; issue 1531, March 5-11), the province, as part of its market diversity efforts, now has a lot of skin in the exports-to-China game, especially when it comes to such sectors as seafood and wine.
China is also a key driver of the province’s lucrative foreign student education sector.
With pipelines and other trade conduits to the outside world hitting roadblocks at too many turns in this province, the future economy of B.C. and the rest of the country, and the standard of living it underwrites for Canadians, is far from guaranteed.
Transpacific weather reports will attest to that.