FX.co ★ Canadian Dollar Weakens as Trump Announces 35% Tariff

The Canadian dollar slipped beyond 1.37 per US dollar on Friday, reaching its lowest point in two weeks. This decline followed US President Donald Trump's announcement of an aggressive 35% tariff on Canadian imports, scheduled for implementation on August 1. President Trump attributed this move to Canada's retaliatory tariffs and its lack of cooperation with Washington, thereby amplifying the pressure on Ottawa to secure a trade agreement before the looming deadline. This recent development intensifies existing tariffs of 50% on Canadian steel and aluminum—Canada being the primary supplier of these metals to the United States. The economic climate further dampened sentiment, as June's data revealed an expanded merchandise trade deficit for Canada, alongside a contraction in private-sector activity for the seventh consecutive month. These factors underscore the sluggish growth momentum, complicating the outlook for the Bank of Canada's monetary policy. At the same time, oil prices have retreated from their recent peaks despite continued production restraint from OPEC+, removing a crucial support factor for the energy-linked Canadian dollar.