The Royal Bank of Canada (RBC) described the impact of Trump’s actions as the “largest trade shock in nearly 100 years.”
Canadian ‘Loonie’ Plummets as Bitcoin Soars Amid Trade War
President Donald Trump slapped Canada and Mexico with a 25% tariff on all goods on Saturday, sending the smaller northern economy into a tailspin as the Canadian dollar (CAD) plunged to its lowest level against the U.S. dollar (USD) in twenty-two years.
Canada and the United States are each other’s largest trading partners. Data from the U.S. Department of Commerce shows a trade relationship worth just under $773 billion at the end of 2023. The two countries share the world’s longest border – nearly 5,526 miles long – and are perhaps the two most integrated economies in the world, with a trade relationship spanning 170 years.
(Mackenzie King, Franklin D. Roosevelt, and Winston Churchill at the 1943 First Quebec Conference in Canada / Canadian Global Affairs Institute)
But in an unprecedented move that Trump had been warning about for months, the Americans imposed a 25% tariff on all Canadian goods – except for Canadian oil which will only see a 10% tariff – sending the CAD or “loonie” tumbling to 1.4793 against the greenback on Monday according to Reuters, meaning it would cost only 68 cents for Americans to purchase a Canadian dollar.
But while the loonie languished in the doldrums, Canadian Bitcoiners saw a bolstering of their portfolios as bitcoin (BTC) roared past $100,000 and was trading at $102,170, up 4.8% over the past 24 hours at the time of reporting, according to Coingecko data.
(Bitcoin soars on Monday despite Trump tariffs / CoinGecko)
“Don’t give your bitcoin away for something that can be printed (e.g. government currencies),” said Canadian finance personality Rajat Soni in a series of X posts on Saturday.
To its credit, the embattled Canadian liberal government, which has steered the country into one of the worst economic periods in recent history, and whose outgoing leader Prime Minister Justin Trudeau stepped down due to increasingly louder calls for his resignation, responded to Trump’s assault with a reciprocal 25% tariff on $107 billion worth of American imports.
A retaliatory tariff response is one of the few areas that Canada’s liberal and conservative parties agree on.
“We must put Canada first,” said Canadian Conservative Party leader Pierre Poilievre in a speech on Sunday. “That is why common-sense conservatives condemn President Trump’s massive unjust and unjustified tariffs which will damage both American and Canadian economies.”
At the time of reporting, Trump had met with leaders from both Mexico and Canada, resulting in a temporary 30-day reprieve of the tariffs.
