[Tariff Shock Resurfaces] Canadian Dollar Slumps on Trump’s 35% Tariff; All Eyes on Canadian Jobs Report
In early July 2025, former President Trump’s renewed wave of tariff announcements is sending ripples across global financial markets. After slapping a 50% tariff on Brazilian imports yesterday, Trump has now declared a 35% tariff on Canadian products, triggering a sharp drop in the Canadian dollar. This article outlines the CAD reaction, key upcoming economic data, and major central bank commentary.
🔻 Canada Hit with 35% Tariff: CAD Drops Sharply
Trump’s announcement of a 35% tariff on Canadian imports has pushed the Canadian dollar lower amid heightened trade anxiety.
Key factors:
- Canada’s heavy reliance on U.S. exports makes it especially vulnerable to U.S. tariff actions.
- Falling crude oil prices have added to the CAD downside.
- Markets remain cautious about further tariff escalation.
Although the USD index has risen only modestly and U.S. equities continue to trend upward, the market tone is more focused on digesting events than full-fledged risk aversion.
📊 Focus Tonight: Canadian Jobs Report and GBP Outlook
The Canadian labor market report due tonight is likely to be a critical juncture for the CAD.
Forecasts:
- Employment change: +8.8K (previous) → Little change expected
- Unemployment rate: 7.0% → Expected to rise to 7.1%
If these forecasts are confirmed, the CAD could face a “double blow” from weaker jobs data and tariff pressure, increasing volatility.
As for the British pound, while under the spotlight, it lacks major domestic catalysts and may simply mirror broader cross-currency flows.
🌐 Other Scheduled Economic Data & Low-Impact Events
Markets are also watching a few minor releases:
- 🇹🇷 Turkey: Current Account (May)
- 🇲🇽 Mexico: Industrial Production (May)
- 🇨🇦 Canada: Building Permits (May)
Impact is expected to be limited unless surprises occur.
🗣 Key Central Bank Speakers: Focus on Europe and Geopolitics
Several noteworthy speakers are expected today:
- Ignazio Visco (Bank of Italy Governor) and Giancarlo Giorgetti (Italian Finance Minister)
→ Speeches at the Italian Banking Association Conference - Boris Vujčić (Croatian Central Bank Governor)
→ Topic: “The Future of Global Trade: Bilateralism, Multilateralism, or Fragmentation?” - Piero Cipollone (ECB Executive Board Member)
→ Attending the Ukraine Recovery Conference
Takeaway: Their comments may influence EUR and European currencies, particularly if they touch on geopolitical risks or EU economic outlooks.
✅ Conclusion: CAD at Risk, Key Turning Point Ahead
Trump’s recent tariff measures are affecting currencies differently depending on country exposure. For the Canadian dollar, today’s dual threat of tariffs and jobs data makes this a pivotal day.
While market sentiment remains broadly supported by equity gains, the FX landscape is volatile and directionless, especially with currency-specific shocks.
Traders should continue monitoring each country’s economic data and political developments carefully to assess localized FX impacts moving forward.
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