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Canadian dollar jumps as US considers interim tariff deal
The currency move follows a Politico report that Trump must decide whether to accept an interim pact before a planned 50% tariff on certain Canadian goods takes effect at midnight on August 19.
The Canadian dollar rose after a Politico report said an interim trade deal between the United States and Canada could be ready for President Trump to decide on, with negotiations moving ahead of broader USMCA talks.
According to the report, the decision centers on whether to accept a package that could include changes to Canadian dairy tariffs, removal of some Canadian retaliatory measures on US goods such as provincial restrictions on US alcohol, and steps toward lowering US tariffs on Canadian automobiles.
Autos remain the core sticking point, with Canada seeking reductions in the 25% US tariffs on automobiles and a framework that would apply primarily to vehicle content produced outside North America, while Washington continues to press Canada to remove barriers to US products and address protectionist policies.
Politico also noted the proposed interim agreement is being viewed as an “early harvest” to unlock further talks under the USMCA, which is scheduled for review this year, while political and economic pressure could rise if tariffs proceed, particularly in states with significant Canada-US trade links.