RIEP Presentation: Us tariffs & How Island Economies Can Respond

Roy L Hales/ Cortes Currents - Around 100 people signed up for the Rural Islands Economic Partnership 2025 Virtual Forum. At least 10 were from Cortes Island and there were others from Quadra, Texada, Hornby, Denman, Cormorant, Malcolm and the Gulf Islands, as well as the Broughton Archipelago. Several of the topics were of great importance to islanders. One of the foremost was Aaron Cruikshank’s analysis of the impact US tariffs will have on island economies and what we can do about it.

Cruikshank is the founder of CTRS, a Market intelligence company from the Lower Mainland that has worked with hundreds of organizations and governments over the past 20 years.

He began his analysis of President Trump’s actions by stating,  “People are really focused on the tariffs, but the message I want to leave with everybody is it's actually trade policy uncertainty disrupting economic patterns. It creates volatility in global markets. It leads to reduced investment, supply chain disruptions, and a contraction in economic activity which hurts everybody. I don't care where you are in Canada, all of that is bad news, but I wanted to make clear that tariffs are just one example of something that contributes to trade policy uncertainty.  We're seeing others, and we'll continue to see others that are going to make these numbers rise.” 

 He put up a chart showing the relative uncertainty that Trump and some of the previous U. S. presidents have created in international trade markets.

Aaron Cruikshank: “This chart goes back to 1960 and the index is based on the impact of policies. You see the baseline jumping up from 25 points to 100 points under Nixon and Ford, that was considered a very big deal in the 60s and 70s. Then in the 80s and 90s you had some spikes with Reagan and Bush. I believe the one with Reagan, or maybe it was Bush Sr., was to do with NAFTA.” 

“If you look at these spikes that are happening  during the first Trump presidency, where we're getting into the 250 range. Very, very, very significant trade uncertainty policy. Then the most recent hockey stick growth there is just in the last couple of months where we're getting up into the 450, 500 range.  We're talking  more than an order of magnitude above baseline for trade policy uncertainty.  We also are hearing talk of President Trump or as I call him, ‘the orange turd,’ wanting to renegotiate the United States–Mexico–Canada Agreement, what some people refer to as NAFTA 2.0. That uncertainty makes people freak out. Threatening to withdraw from certain trade agreements makes the chart do this. Putting export controls on specific technologies or goods, that makes the chart do this, saying the US is only going to allow X amount of this good.”

“That affects countries like Canada a lot because we end up exporting a lot of raw materials into the US: lumber, oil, metals, minerals, things like that. We supply 80 percent of the US potash, which is used for fertilizer to grow their food. So, they might be putting import caps on things like that. That makes markets go “woo.’”