Canadian Dollar slides as Trump escalates trade war with Canada
USD/CAD extends its advance on Monday, trading around 1.3830 at the time of writing, up 0.52% on the day.
The Canadian Dollar (CAD) experienced a decline on Monday as tensions between the United States and Canada escalated amid trade negotiations. The US Dollar (USD) gained support from the prospect of increased tariffs, which intensified the trade tensions. Canada's Prime Minister Mark Carney vowed to retaliate "dollar for dollar" starting September 8, after the US imposed 50% tariffs on some Canadian products.
President Donald Trump further raised concerns on Monday, announcing that tariffs on all Canadian cars, trucks, automotive parts, and steel will increase to 50% starting January 1, 2027, while accusing Canada of unfairly benefiting from its trade relationship for years. The Canadian economy, reliant on trade with its US neighbor, now faces uncertainty surrounding the trade relations.
Meanwhile, geopolitical developments in the Middle East, particularly the sanctions on Iran, may provide some support for the CAD through increased Oil prices.
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- 76 percent in Canada say ending US trade negotiations was right call: Survey thehill.com
- Trade war enters new phase as Canada readies ‘dollar-for-dollar’ response globalnews.ca
- U.S.-Canada trade war intensifies cbsnews.com
- Trump says U.S. will hike Canada auto tariffs to 50% as trade war escalates cnbc.com
