USD/CAD Steady Despite New Tariffs
05 March 2025
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USD/CAD continued its steady upward movement despite President Trump’s announcement of new tariffs, reflecting a muted reaction from the forex market.
On March 4, Trump imposed a 25% tariff on imports from Canada and Mexico, with an additional 10% tariff specifically targeting Canadian energy products. Tariffs on Chinese imports were also doubled from 10% to 20%.
Canada responded immediately with 25% tariffs on CA$30 billion worth of U.S. goods and plans to extend these to another CA$125 billion in the coming weeks. China announced it will impose new tariffs of 10–15% on U.S. agricultural products starting March 10, while Mexico is expected to announce its retaliatory measures on March 9.
Despite these escalations, USD/CAD’s rise was gradual rather than explosive, suggesting markets may still view this as a trade scuffle rather than a full-blown trade war for now. Attention now turns to President Trump’s next steps, as he has hinted at further retaliatory measures, while reports suggest he is also considering easing sanctions on Russia.
