Market Wire, North America

In a response that could add momentum to an escalatory cycle, Prime Minister Justin Trudeau this evening said “Canada will be responding to the US trade action with 25 percent tariffs on $155 billion dollars worth of American goods,” including immediate tariffs on $30 billion as of Tuesday, and another $125 billion in 21 days* to allow Canadian companies to seek alternatives”. “This is a threat against our whole country,” he said, and “as part of our response, we are considering, with the provinces and territories, several non-tariff measures including some related to critical minerals, energy procurement, and other partnerships”....

The US dollar is retreating against the Mexican peso and Canadian dollar after Reuters reported that the Trump administration plans to implement tariffs on both of its biggest trading partners on March 1—a month later than had been previously threatened. Markets see this timeline providing room for Mexican and Canadian leaders to satisfy the president’s demands on border controls, potentially avoiding extremely-negative outcomes for all three economies. This news item should be taken with a Truth Social-sized grain of salt: the president has walked back several similar articles in recent weeks, indicating in each case that he does not intend...

The Canadian dollar and Mexican peso are spiralling lower this afternoon after US president Donald Trump told reporters in the Oval Office that he would follow through with imposing 25-percent tariffs on the two countries in retaliation for allowing fentanyl smuggling across their borders. According to some reports, Trump also suggested that he will make a determination on whether oil imports will be covered “this evening”. The story is still developing, and is clearly triggering stops across currency markets, but may not have staying power: we would caution market participants against overreacting, and will again reiterate our view that tariffs...