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Canada faces tariff threat from US that could disrupt USMCA ties
Societe Generale says the threatened 50% tariff on Canadian vehicles and parts would pressure Canada to retaliate and risks shifting it toward production dependent on US discretion.
Societe Generale’s Dev Ashish warned that a threatened 50% tariff by the Trump administration on Canadian vehicles and parts points to a broader effort to redirect more manufacturing investment to the US, raising doubts about the reliability of the USMCA relationship.
The analysis says Canada is likely to face immediate pressure and has plans for retaliatory measures, while the situation also raises a question over whether Canada can remain an equal treaty partner or becomes a production satellite reliant on US discretion.
In the FX market wrap tied to these themes, FXStreet noted that investors were also weighing Middle East developments and US sanctions on Iran, with the US dollar steadying as diplomatic efforts progressed in reports about Pakistan offering terms to Iran under a memorandum of understanding.
The same roundup highlighted currency moves in other pairs, including GBP/USD holding above 1.3600 and EUR/USD trading below 1.1700 as investors maintained a cautious mood.
Latest closeEUR/USD 1.157 ▲0.4%|GBP/USD 1.354 ▲0.3%