USD/CAD Climbs to 1.3700 After Trump Slaps 35% Tariff on Canadian Imports

USD/CAD Climbs to 1.3700 After Trump Slaps 35% Tariff on Canadian Imports

Published: July 11, 2025
Category: Forex | Trade Policy

Tariff Tensions Lift USD/CAD Higher

The USD/CAD currency pair surged to 1.3700 in early Asian trading on Friday, gaining momentum after US President Donald Trump announced a sweeping 35% tariff on Canadian imports, effective August 1. The move comes amid heightened tensions between Washington and Ottawa over retaliatory trade actions and a lack of progress in reaching a trade deal.

Trump Pressures Canada With Harsh Trade Measures

Trump cited Canada’s retaliatory tariffs and “refusal to cooperate” as the primary reasons for the new tariff policy. The 35% levy adds to existing 50% tariffs on Canadian steel and aluminum, further escalating trade friction with the US's largest metals supplier.

Additionally, Trump announced plans to notify the European Union of similar measures “today or tomorrow,” and earlier this week sent tariff request letters for a range of countries, including:

• Brazil – 50%
• Algeria, Libya, Iraq, Sri Lanka – 30%
• Philippines – 20%

These sweeping trade threats have bolstered demand for the US Dollar (USD), as the Canadian Dollar (CAD) came under pressure from the uncertainty.

Market Reaction and Fed Commentary

The US Dollar’s strength was further supported by Federal Reserve official Austan Goolsbee, who on Thursday dismissed the notion that the Fed should cut interest rates to lower government borrowing costs, emphasizing the Fed's dual mandate of jobs and price stability.

This, alongside a hawkish tone from the Fed and renewed global trade risk, added upside momentum to USD/CAD.

Key Technical Levels:

• Current Level: 1.3700
• Immediate Resistance: 1.3735
• Support Level: 1.3650
• Outlook: Bullish (short-term)