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Canadian dollar weakens as US tariff threat escalates
BNY said Washington’s fresh 50% duties, due to start in 30 days on some dairy, hockey gear and alcohol, are pressuring the Canadian dollar amid strained trade talks.
BNY strategist Geoff Yu said the Canadian dollar is under pressure after the Trump administration announced fresh 50% tariffs on selected Canadian goods, framing the move as a direct trade shock.
According to the BNY commentary, the planned levies are due to take effect in 30 days and target items including milk and cream, hockey equipment, and alcohol, while excluding major resource imports such as energy, potash, fish, and critical minerals, along with goods already covered by separate auto and steel duties.
Washington justified the action under Section 338 of the 1930 Tariff Act, citing what U.S. officials called unfair Canadian treatment of U.S. exports, and it said there will be no USMCA exemptions.
BNY also said the announcement adds strain to already fragile trade talks after the U.S. declined to renew USMCA, with Canada trying to defend market access and limit domestic damage as the CAD slipped on the news.