The Canadian dollar has suffered a major blow following a decision by US President Donald Trump to impose tariffs on softwood lumber from Canada. A trade dispute has escalated between Canada and the US surrounding a new Canadian milk policy which US producers are unhappy with stating it violates the North Atlantic Free Trade Agreement (NAFTA). The US have retaliated by imposing anti-subsidy tariffs of around 20% on lumber imports from Canada which revolves around another dispute that has been going on since the 1980’s.
A tweet from Trump earlier read “Canada has made business for our dairy farmers in Wisconsin and other border states very difficult. We will not stand for this. Watch!”
Canada have responded saying the tariff is unfair and punitive and have hinted at litigation although the preferred option is to come to some agreement. As far as the Canadian dollar is concerned the tariff is unwelcome news for this sector and the concern is that other sectors may also be aimed at. The US department of commerce has identified a number of Canadian companies which it views are state subsidised giving them an unfair advantage.
The Canadian dollar looks set to be in for a very volatile period and any delay in reaching agreement could see other sectors also hit with tariffs which could see CAD exchange rates fall even further.
Canadian retail sales are released this afternoon are expected to come out poorly adding to the Loonies problems. Canadian Gross Domestic Product numbers released on Friday are also expected to fall by 0.5%in February which could round off a very bad week for the Canadian dollar. Those clients looking to buy Canadian dollars are currently looking at an excellent opportunity which may not be around for much longer as the dust surrounding this trade dispute should eventually settle.
Further news or suggestions of trade tariffs could continue to weigh heavily on Canadian Dollar exchange rates, and clients with a CAD buying or selling requirement should detail their plans to their account manager. Call us today on 01494 725 353 to learn more.
James and his colleagues are always courteous and helpful. I have also never been able to find rates of exchange that are more competitive. I am particularly impressed with the service, as I am not in the habit of transferring massive amounts!
As always a really quick and easy transaction. James is very knowledgeable and helpful. Great rates.
Always helpful and they always give rates at the very top of the range. Quick transfers to our french bank account – highly recommended. Well done James Lovick 😉