Canadian bankers say cautious clients keeping 'their powder dry' amid Trump tariff threats
United States President Donald Trump has not officially imposed 25 per cent tariffs on Canadian goods, but his threats have already created a “bit of stasis” among Canadian banking clients who have become more cautious about their next steps, executives say.
The tariffs, originally to be imposed on Feb. 4, were delayed by a month after Canada promised to take tougher action against supposedly high illegal migration and drug smuggling from its end. With a week to go, Trump hasn’t shown any signs of pulling back.
“People are holding their powder dry and waiting to see what’s going to happen,” Phil Thomas, Bank of Nova Scotia’s chief risk officer, said on a call with analysts on Tuesday. “As a result, whether it’s on the retail side, the corporate side or the commercial side, you kind of see a bit of stasis right now. It’s causing people to sort of pause and think about what they’re going to do.”
Bank of Montreal chief executive Darryl White said his clients in both the U.S. and Canada have adopted a “more cautious posture around capital deployment.”
Both Bank of Nova Scotia and Bank of Montreal — which reported their results on Tuesday — set aside money to tackle the potential impacts of the tariffs, but they weren’t able to provide a more concrete outlook on what credit losses could look like if the tariffs are imposed.
In order to find the exact number, they have to work through a number of factors such as the size and duration of the tariffs, the degree of retaliation from Canada and the amount of government subsidies, Thomas said.
“It’s really hard to give you a range or an outcome at this point in time without having some understanding of what these tariffs look like,” he said. “If tariffs come along in Q2, we’ll do
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