Canada’s currency slid to a 14-month low in Tuesday after U.S. Commerce Secretary Wilbur Ross announced a 20% tariff on Canadian softwood lumber imports, valued at $5.66 billion USD, or 1% of Canadian GDP.
Tensions were ratcheted up even further on Tuesday when President Trump accused Canada of crippling the dairy industry in Wisconsin, “Canada has made business for our dairy farmers in Wisconsin and other border states very difficult. We will not stand for this. Watch!,” said Trump on Twitter.
Trump’s sharp comments also prompted a stern response from Canadian Prime Minister, Justin Trudeau, who spoke on Tuesday at Ontario-based software company, Vidyard.
As the Canadian Broadcasting Company (CBC) reports, when asked about America’s protectionist trade policies under the Trump administration, Trudeau said:
"Standing up for Canada's interests is what my job is, whether it's softwood or software."But Trump's increasingly aggressive rhetoric on Canadian trade and NAFTA renegotiation, in addition to slumping crude oil prices, which slipped under the $50 mark for a second time this year on Tuesday, have taken a heavy toll on the Canadian dollar.
The USD/CAD exchange rate hoovered just under 1.35 on Monday, but by 11:30 a.m. EST on Tuesday morning, the exchange rate had drifted all the way to 1.36265 - the lowest level for the CAD since February 26, 2016!
And since April 13th, when the Canadian dollar was trading at a 2-month high of 1.32239 vs. the USD, the CAD has depreciated by 3%:
CAD notes photo by Sara Long