The Canadian dollar fell on Monday morning after trade talks between Ottawa and Washington fell apart, leaving both sides facing higher prices on a wide array of imported goods.
The U.S. on Saturday slapped 50% tariffs on around $20 billion worth of imports from Canada, its second-biggest trading partner after Mexico. The affected goods span dairy, wine, wood products, ceramics and a slew of other areas.
Canadian Prime Minister Mark Carney said he would retaliate "dollar for dollar" with tariffs starting Sept. 8, targeting sectors such as steel, dairy, agricultural equipment, paper and electronics. Details will be released "in the coming days," Carney added.
The Canadian dollar was 0.55% lower against the U.S. dollar at 4:30 a.m. ET. The loonie also dipped against the euro, British pound and Japanese yen.
"As a smaller, more open economy, Canada has more to lose from this, but Prime Minister Mark Carney seems to have opened the door to more fiscal stimulus to support affected business," FX strategists at bank ING wrote in a Monday note.
