Retaliation to U.S. tariffs could be a 'disaster' for New Brunswick, says economist

University of New Brunswickeconomist Herb Emery says Canada's retaliation to U.S. tariffs could be a disaster, especially in New Brunswick.

Canada laid out its list of U.S. products targeted for counter-tariffs totalling $16.6 billion to come into effect on July 1, following President Donald Trump's trashing of NAFTA and other deals.

• Tariffs 101: How Canada's counter-tariffs on U.S. goods work, and what they'll do

But Emery says that's a dangerous game.

"The last time we really saw this tit for tat on a large scale was 1929, 1930, and it was a disaster then, and it's going to be a disaster now if it keeps going," said Emery.

"For the regional Maritime economy, especially in New Brunswick, we're the most exposed to the U.S. market. I think it's something like 90 per cent plus of our exports are going there."

Emery said even the uncertainty of the tariffs will cause people to think twice about setting up operations in New Brunswick.

Turn of events

Emery said he is surprised with how Canada-U.S. trade relations have changed over the past five years. He said when Trump came in, Canada didn't react quickly enough and took it too lightly.

He said tariffs like the softwood lumber tariff weren'ttaken seriously enough.

"When you are a province that has so much of your exports going to one market, what's plan B?" said Emery.

"We're headed now back to a period of history we didn't think we'd repeat, which is starting to look like the boom conditions that started leading into the Great Depression, and so that's the big spectre on the horizon."

Emery said the hope now is for the federal government to calm things down and reduce some of the uncertainty in the market.

"We took for granted what we developed, and it's now at risk," said Emery.