Post on social media comes amid ongoing tariff war

Some analysts see pressure on Canada to revalue its currency

President Donald Trump disembarks Air Force One at Morristown Airport in Morristown, New Jersey, on Friday (local time). [AP]
President Donald Trump disembarks Air Force One at Morristown Airport in Morristown, New Jersey, on Friday (local time). [AP]

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Donald Trump has taken aim at the exchange rate between the US and Canadian dollars, raising the prospect that the two countries' ongoing trade conflict could escalate beyond tariffs into currency disputes.

Trump said Sunday (local time) on his Truth Social platform that "the imbalance between the US and Canadian dollar is unacceptable," adding, "It's been that way for years, but no more."

Both countries use the dollar as their currency unit. The current exchange rate stands at 1.38 Canadian dollars (CAD) per US dollar (USD), with both nations operating under floating exchange rate systems driven by foreign exchange market supply and demand.

Trump did not specify what he meant by the "imbalance" between the two currencies, but his remarks appear to target the recent trend of the Canadian dollar weakening against the US dollar.

In the 2010s, the Canadian dollar traded at roughly parity with the US dollar but has weakened since. Data from the Bank of Canada show the annual average exchange rate rose from 1.25 Canadian dollars per US dollar in 2021 to 1.40 last year.

A weaker currency is generally seen as an export advantage, as it improves price competitiveness in the destination market. Trump may view Canada's weaker dollar as giving it an unfair edge in trade with the United States.

Trump's currency remarks came as the US administration imposed 50 percent tariffs on about $20 billion worth of Canadian imports on Aug. 22, and Canadian Prime Minister Mark Carney announced retaliatory tariffs of the same scale set to take effect Tuesday. Some analysts now suggest the Trump administration could use the weak Canadian dollar as grounds for additional measures during negotiations, or even pressure Canada to revalue its currency upward.


yckim6452@heraldcorp.com