New 50% US tariffs on Canadian autos, steel, and other products spark CAD selloff amid collapsing trade talks.
The USD/CAD pair climbed 0.52% to 1.3830 on Monday as the Canadian Dollar weakened following the breakdown of US-Canada trade negotiations. The US imposed 50% tariffs on select Canadian products, with President Donald Trump announcing broader tariffs on cars, trucks, automotive parts, and steel starting January 1, 2027.
Trade tensions escalated after talks collapsed on Friday, with Canadian Prime Minister Mark Carney pledging retaliatory tariffs beginning September 8. The US accused Canada of exploiting trade relations, urging companies to relocate production to avoid penalties.
The tariff hike adds pressure on Canada’s trade-dependent economy, while geopolitical risks in the Middle East may offer limited support via higher oil prices.