The Canadian dollar is sliding lower on Aug. 24 after trade talks with the U.S. collapsed over the weekend.
The loonie, as Canada’s currency is known, was down 0.45% and trading at $0.7223 against the U.S. dollar in early trading.
Canada’s dollar was also falling against a basket of other international currencies, including the euro, British pound, and Japanese yen.
So far in 2026, the loonie has declined as much as 5% against the U.S. dollar, dropping from a peak of $0.74 U.S. in January to a low for the year of $0.70 U.S. in June.
Canada’s currency is also among the most shorted by F/X traders (foreign exchange traders), which means they are betting on future declines in the loonie.
The latest dip in the Canadian dollar comes after trade talks between officials in Ottawa and Washington, D.C. fell apart, leaving both sides facing higher prices on imported goods.
The U.S. has placed 50% tariffs on $20 billion U.S. worth of Canadian goods, ranging from hockey sticks to wine and furniture.
Canadian Prime Minister Mark Carney said in recent days that Canada will retaliate “dollar for dollar” with tariffs starting Sept. 8.
Canada is looking at placing tariffs on American items such as steel, dairy, agricultural equipment, paper, and electronics.
While not insignificant, the new 50% U.S. tariffs represent only a fraction of the nearly $400 billion U.S. in goods that Canada sends to neighboring America each year.
Analysts note that the goods hit with new U.S. import duties only comprise 0.6% of Canada’s gross domestic product (GDP).
Still, economists seem to agree that a tit-for-tat trade war with the U.S. could be costly for Canada and could further slow the country’s economic growth.
Earlier this year, Canada fell into a short and shallow recession, defined as two consecutive quarters of economic contraction.
