Bank CEOs call tariffs manageable; smaller firms struggle to find solid ground
A Wall Street Journal account by CEO Brief editor Lila MacLellan contrasted the measured tone of executives reporting quarterly results to investors with the unsettled tone of executives communicating with their own workforces. Three of Canada’s largest bank chief executives — White of Bank of Montreal, Harry Culham of CIBC, and McKay of Royal Bank of Canada — used earnings calls this week to discount the latest tariff escalation’s economic weight.
White, asked about the trade environment on Bank of Montreal’s call, said that removing “the emotion from the topic,” the 50% tariffs were “absolutely manageable.” The Journal noted that while the levies are high, they apply to a narrow base of Canadian goods, limiting direct economic exposure.
CIBC CEO Harry Culham acknowledged “that rising trade and geopolitical tensions are having real consequences for the economy” and that “developments over the past week are a reminder that the path forward will not be linear.”
Royal Bank of Canada CEO Dave McKay told investors Canada’s economy has remained resilient through recent shocks and that “increased foreign direct investment and new trade relationships add to our optimism.”
The tone shifted when MacLellan spoke with Jen Riley, CEO of the British Columbia Chamber of Commerce. Riley said Monday’s inbox filled quickly. “Monday morning the emails were flowing,” she said. “It’s interesting because this isn’t a moment where CEOs are able to say, ‘Don’t worry, we’ve got you,’” because most did not feel that way, she told MacLellan.
Instead, Riley said, business leaders were offering “compassion, empathy” to nervous employees and fellow executives, and the moment was still one for “convening, listening, understanding.”
British Columbia, with its resource-heavy economy, is among the provinces that will suffer most if the trade clash continues or escalates, the Journal reported. Riley said she had heard from a trucking company that had lost customers who typically transport lumber south of the border, and had fielded calls from the concerned and bewildered leaders of a medium-density fiberboard manufacturer, a successful jewelry brand, and a suburban Vancouver stationery maker.
The breakdown of trade negotiations follows a string of policy changes over the past several months, making contingency planning difficult, companies have told her. “It’s: What is the solid ground that we can run our businesses on?” Riley said.
Lucas Malinowski, CEO of the Global Automakers of Canada Association, which represents companies including Honda, Toyota, and Lexus, said he would describe the leaders his group represents as “frustrated” with the trade environment. Most joined auto companies “to make great cars, not to be experts on geopolitics,” he told MacLellan on a call from Ontario.
That said, they are not in a panic. Responding to shifting external forces has become “almost normalized in some ways,” Malinowski said of the auto industry.
Town halls are usually a big part of company culture, he noted, but he had not heard of any happening yet, possibly because new developments keep coming and it is “a bad look to respond to every media alert.”
“You want to be in a position to say, ‘OK, here’s where we think the potential impacts are, and here’s what we’re going to do to continue to support the business and support the workers,’” Malinowski said.
“If you’re just pulling everyone together to say this is kind of crazy and we don’t know yet what it means, that’s not helpful to anyone,” he added.