Posthaste: Canadian dollar tanks, gold hits all-time high as Donald Trump vows tariffs tomorrow
It’s starting to look like we might not be able to dodge those tariffs after all.
Canadians breathed a sign of relief when newly elected U.S. President Donald Trump failed to carry out his threat on his first day of office.
Turns out that may have been just a temporary reprieve.
That punishing reality loomed closer yesterday when Trump reinforced that he would carry out his threat to impose 25 per cent tariffs on imports from Canada and Mexico on Feb. 1.
“We’ll be announcing the tariffs on Canada and Mexico for a number of reasons,” Trump told reporters Thursday in the Oval Office.
“Number one is the people that have poured into our country so horribly and so much. Number two are the drugs, fentanyl and everything else that have come into the country. Number three are the massive subsidies that we’re giving to Canada and to Mexico in the form of deficits.”
The market reaction was swift. The Canadian dollar shed as much as 1.2 per cent, falling to 68.5 cents U.S. late last night.
The loonie has been facing some major headwinds in recent months on concerns about tariffs, the economy and the growing gap between the Bank of Canada and Federal Reserve interest rates.
It has lost about 6 per cent against the U.S. dollar in the last quarter and hit its lowest since 2020 earlier this year, Bloomberg reports.
The currency may fall even further if tariffs, as predicted, bring on a recession and push the Bank of Canada to cut interest rates deeper than planned.
Trump’s threat, on the other hand, was a boon for gold as investors ran for safety.
The yellow metal was trading at an all-time high of US$2,842.80 this morning after leaping 1.3 per cent last night. The “swift move to safety” was sparked by the tariff threats, escalating
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