Trump shocks markets with 35% Canada tariff — dollar surges, global currencies plunge
Photo: Dollar rises against global currencies amid new Trump trade war escalation (Getty Images)
The US dollar strengthened following new announcements from President Donald Trump about import tariffs. He announced a 35% tariff on Canada and plans for 15%-20% tariffs on most other trading partners, reports Reuters.
The dollar began to rise amid growing uncertainty. Investors are worried about a new round of the US trade war.
Canadian dollar and other currencies fall
The Canadian dollar dropped 0.27%, to 1.3693 Canadian dollars per US dollar, after the tariff announcement.
"Canada finds itself in the firing line, and it's obviously not the end of the week we wanted to see," said IG market analyst Tony Sycamore.
EU and other countries' response
Trump hinted that the European Union could receive a letter specifying tariff rates as early as Friday. This raised doubts about the progress of trade talks with Washington.
The euro fell 0.2%, to $1.1682, marking a nearly 0.9% drop for the week. The Australian dollar also declined 0.11%, to $0.6581.
Brazil's stance and currency drop
Brazil's President Luiz Inacio Lula da Silva said he hopes for a diplomatic solution to the threat of 50% tariffs but is ready for retaliatory measures. Despite this, the real declined, ending the week down 2% — its largest drop in nearly five months.
The British pound fell 0.16%, to $1.3558, while the New Zealand dollar lost 0.34%, to $0.6015. The yen dropped 0.44%, to 146.91 per dollar, with a weekly decline of about 1.6% after Trump imposed a 25% tariff on Tokyo.
Dollar holds steady as markets remain tense
Market reactions to the current wave of Trump's tariffs have been moderate compared to April. However, investors remain on edge. All eyes are on August 1 as a possible final date for a new escalation in the trade war.
The dollar rose 0.2% against a basket of currencies, to 97.79, closing the week up 0.8%. "For the moment, I think the uncertainty is just playing to a little bit of US dollar stability, and I wouldn't be too surprised if that holds for another couple of weeks," said Ray Attrill, head of FX research at National Australia Bank.
Cryptocurrencies hit records amid instability
Bitcoin hit another historic high, reaching $117,685.96. The rise is driven by demand from institutional investors.
"The ... new record reflects the resilience of global risk appetite even in the face of Trump tariffs," said DBS FX and credit strategist Chang Wei Liang. He also noted positive expectations for the upcoming Crypto Week in the US Congress.
Dollar and euro
The euro has risen significantly against the dollar in recent months. In the first half of 2025, the dollar index posted its worst start to a year since 1973. Trump's chaotic tariff rollouts have raised concerns about the US economy and Treasury security.
According to the IMF, the US dollar's share in global currency reserves fell to 57.7% in Q1 2025. The euro's share rose to 20.1% — its highest level since late 2022.
