The Canadian dollar has dropped to its lowest level in more than two decades following U.S. President Donald Trump’s announcement of sweeping 25 percent tariffs on Canadian goods and 10 percent tariffs on energy, set to take effect on Tuesday.
As of this morning, the loonie was trading at 68.13 cents US, marking its weakest performance against the U.S. dollar since 2003. This represents a significant decline from 69.04 cents US on Friday, reflecting heightened economic uncertainty and investor concerns over the escalating trade tensions between Canada and the United States.
The fallout from the tariff announcement has also impacted global markets, with futures pointing to sharp declines in U.S. stock indexes when trading opens today. Analysts predict further volatility as businesses and financial institutions assess the potential consequences of the trade dispute.
In response to the U.S. tariffs, the Canadian government has vowed to implement countermeasures, beginning with $30 billion in tariffs on American imports starting Tuesday. An additional $125 billion in duties on U.S. goods is planned within 21 days, pending industry consultations.
The sudden depreciation of the loonie is expected to have broad economic implications, making imports more expensive for Canadian consumers while potentially providing a boost to exports. However, economists warn that rising costs of essential goods, higher inflation, and reduced investor confidence could put additional pressure on Canada’s economy.
As tensions escalate, Prime Minister Justin Trudeau is scheduled to speak with President Trump today in an effort to navigate the deepening trade rift. Meanwhile, Ontario Premier Doug Ford has announced measures to protect provincial industries, including the cancellation of a $100 million contract with Starlink and a ban on U.S. firms securing Ontario government contracts.
With financial markets reacting sharply and uncertainty looming, Canadian businesses and consumers are bracing for a turbulent period ahead as the trade war unfolds.