Canadian dollar drops as Trump’s tariffs take effect after failed trade deal

The Canadian dollar fell on Monday as a trade dispute between Canada and the United States escalated after negotiations failed to produce a deal.

The US imposed 50 percent tariffs on about $20 billion worth of Canadian imports on Saturday, covering products including dairy, wine, wood, furniture and cement.

Canadian Prime Minister Mark Carney said Canada would respond “dollar for dollar” with tariffs beginning September 8, targeting US steel, dairy, agricultural equipment, paper and electronics.

The Canadian dollar was down 0.58 percent against the US dollar at 8:00 AM ET and also weakened against the euro, pound and yen.

US Trade Representative Jamieson Greer told CNBC on Monday that an agreement had been close but Canada “wanted more” than Washington was prepared to offer.

“We offered them the best access to the United States of any country in the world,” Greer said.

Carney, however, said Washington had “asked too much and offered too little.”

“We were not prepared to compromise Canada’s sovereignty or undermine our key industries,” he said.

Economists warned Canada could face a greater economic impact from the dispute because of its reliance on US trade.

Capital Economics economist Bradley Saunders said some of the most exposed Canadian industries “could be crippled” by the tariffs.