USD/CAD edges lower as Canada tries to close trade deal with Trump
Reports continue to highlight ongoing meetings between top negotiators from Canada and the United States ahead of an August 19 tariff deadline.
CBC today reports that Canada-U.S. Trade Minister Dominic LeBlanc and his American counterpart “are aiming to present U.S. President Donald Trump a path to a potential
trade deal as early as Monday," citing unnamed sources.
On Aug 19, 50% tariffs will hit hundreds of Canadian imports and the US will hit other countries with similar tariffs. Today, LeBlanc is meeting with US Trade Representative Jamieson Greer in Washington in the third face-to-face meeting.
Aside from avoiding the tariffs, which is the baseline for any agreement, Canada is aiming to lower tariffs on steel, aluminum, lumber and autos. Notably, this latest report includes lumber in the list while prior ones didn’t. Various other reports said Canada could be looking for a combination of lower tariffs and quotas on steel and aluminum. Tariff rates are currently at 50% in a move that’s crippled the Canadian steel industry in particular.
In terms of USD/CAD, there has been some steady selling following the big May-June runup and we’re now approaching the 50% retracement. If there’s a quality deal that lends some certainty to this and USMCA, then that will be a big tailwind for the loonie. But in Trump’s world, that’s a big ask.
This article was written by Adam Button at investinglive.com.