Trump Tariff Threat Drags Loonie Down

The Canadian dollar fell on Monday as trade tensions between Canada and the US escalated. President Donald Trump threatened to raise tariffs on Canadian automobiles, car parts, and steel to 50% from January 1, 2027.

This move caused investors to reassess the loonie's value, leading it to weaken by around 0.6% against the US dollar. The loonie was trading at approximately 72.24 US cents, down about 0.4% on the day.

The Canadian government has pledged to match Washington's measures dollar for dollar with retaliatory levies targeting US steel, dairy, appliances, agricultural equipment, pulp and paper, and electronics. These measures are set to take effect on September 8.