50% tariff on Canadian goods weakens loonie, strategist warns
Asian currencies consolidated against the U.S. dollar on Monday as traders weighed mixed signals over the U.S.-Iran conflict, according to The Wall Street Journal. American forces started a new round of strikes against Iran at the commander in chief’s direction, U.S. Central Command said in a post on social media platform X. At the same time, mediators were working to push the U.S. and Iran into a new ceasefire.
The U.S. dollar was little changed at 162.47 yen and 0.1% higher at 1,477.50 won, while the Australian dollar was 0.1% higher at US$0.6999, LSEG data show, the Journal reported.
The Canadian dollar weakened after President Trump’s plan to impose a 50% tariff on a broad range of goods, the Journal reported. Karl Schamotta, chief market strategist at forex firm Corpay, told the Journal the escalation in trade tension “threatens to damage the Canadian economy and add to the strain of an already vulnerable currency.”
Schamotta said the 50% duty will apply regardless of whether goods were previously exempted under USMCA’s terms, removing a key protection for Canadian exporters. He said there are carve outs, such as energy, which should limit the macroeconomic blow.
Along with the tariffs, the White House unveiled a series of measures aimed at building up aluminum-smelting capacity in the U.S., which Schamotta warned could hit Canada hard. Canada is America’s top foreign supplier of the metal, he said.