CAD Sinks as US-Canada Trade Talks Collapse into War

The Canadian Dollar (CAD) weakened against the US Dollar (USD) on Monday after trade talks between the two countries collapsed, leading to a trade war. The USD/CAD pair rose to near 1.3820 during the early European session.

According to CNBC, Washington imposed 50% tariffs on some Canadian products on Saturday after trade talks fell apart on Friday. In response, Canadian Prime Minister Mark Carney said that Canada would impose its own retaliatory tariffs beginning on September 8.

The collapse of trade talks has added to the broader backdrop of tariff uncertainty, with analysts at Deutsche Bank noting that trade frictions have re-emerged as a key theme. The bank highlights that the breakdown in negotiations has quickly fed into market sentiment, reinforcing concerns over the trajectory of US-Canada trade relations.