Pro Tips
How Trump’s Tariffs on Canada Could Affect Forex and Crypto Traders
Apr 10, 2025
As the dust settles from the 2024 presidential election, the prospect of Trump tariffs on Canada again raises concerns for traders. In March 2023, Trump hinted at reinstating tariffs on Canadian goods. The former president stated that Canada was “taking advantage of us” and that he would impose tariffs on their products if he were elected again.
The reinstatement of Trump tariffs on Canada would have far-reaching consequences for many sectors of the economy, including forex and crypto trading. This Trump’s tariffs 2025 guide examines the potential impact of Trump’s tariffs on Canada and how they could affect traders in the U.S. and abroad.
Table of Contents
What Are Trump’s Tariffs on Canada and Why Are They Happening?
How These Tariffs Affect the USD/CAD and Related Forex Pairs
What Can Forex and Crypto Traders Do to Stay Ahead? (Tactical Guide)
What Are Trump’s Tariffs on Canada and Why Are They Happening?
What Tariffs Has Trump Imposed on Canada?
Trump’s tariff regime has already targeted a range of Canadian industries, with the most recent trade policy shift he announced in 2025 hitting Canada especially hard. The three-tiered tariff framework, which impacts core sectors of Canada’s export economy, includes:
A 25% tariff on 40% of all Canadian exports to the U.S.
A 25% tariff on Canadian steel and aluminum
A 25% tariff on Canadian auto exports
Given Canada’s dependence on trade with the U.S., its largest trading partner, the tariffs will significantly impact tens of billions of dollars in annual bilateral trade.
Why Is Trump Imposing These Tariffs?
Trump’s administration has framed these actions under three primary justifications:
Protecting U.S. jobs and manufacturing industries — especially steel, autos, and industrial materials.
Citing overreliance on imports and unfair trade practices.
Punishing what the U.S. sees as currency and subsidy manipulation. Trump’s economic team has argued Canada’s domestic subsidies distort competition in sectors like lumber and dairy.
Sending a broader geopolitical message — These tariffs align with Trump’s “America First 2.0” strategy, which includes a 10% universal global tariff and aggressive bilateral enforcement mechanisms.
Canada’s Response and Leadership Role in Counter-Tariffs
In response, Canada has launched a $60 billion counter-tariff package targeting American imports. This includes:
Tariffs on U.S. agricultural products
Consumer goods
Machinery and manufactured components
According to Joly, Canada’s goal is to lead a coalition of retaliatory action against U.S. tariffs, including alliances with the European Union and Asian economies.
Why This Trade Conflict Is Different from 2018
While Trump’s first term featured tariff disputes with Canada, 2025 presents a more politically and economically volatile environment:
Global protectionism is rising, and this new round of tariffs is more comprehensive.
Trump has hinted at extreme rhetoric, even joking that Canada could become “the 51st U.S. state.”
The geopolitical backdrop includes Russian aggression, Arctic militarization, and a fracturing international rules-based order, all of which increase the stakes of economic warfare.
Political and Social Reactions
In Canada
Public opposition to U.S. interference has hardened. Joly asserts that Canadians have united in opposition, rejecting any idea of diminished sovereignty or economic dependency.
In the U.S.
Joly calls on the American public to pressure their government to end the trade war, citing risks to millions of U.S. jobs.
Internationally
Canada is actively lobbying European and Asian allies to form a united front against American tariffs. Conversations have already occurred with EU Trade Commissioner Maroš Šefčovič and other partners.
Why Traders Should Pay Attention
This isn’t a routine policy shift but a live economic confrontation between two G7 nations. For forex and crypto traders, that means:
Boosted volatility in USD/CAD and commodity-linked currencies.
Potential for trade spillovers into emerging markets and global supply chains.
Growing market interest in non-sovereign assets like Bitcoin as geopolitical and trade-related tensions escalate.
Related Reading
• Trump News
• Tariffs
• Trump Tax Plan 2025
• Trump Taxes
How These Tariffs Affect the USD/CAD and Related Forex Pairs
USD/CAD: The Core Battleground When Trade Tensions Rise
USD/CAD reflects the value of the U.S. dollar relative to the Canadian dollar, and it’s directly influenced by trade policy between the two nations. Trump’s 25% tariffs on Canadian steel, aluminum, autos, and broader exports disrupt:
Trade balances between the two economies
Investor sentiment toward Canadian industry
Inflation and interest rate expectations on both sides of the border
Key Market Impacts
CAD Weakens When Tariffs Are Announced Canadian export sectors (autos, mining, metals) are hit hard → investors expect lower GDP growth → CAD loses value
USD Strengthens (Short-Term) Due to Capital Inflows. If investors flee Canadian assets in favor of U.S. dollar safety, USD/CAD climbs.
Volatility Spikes on Retaliation Headlines When Canada responds with counter-tariffs (like the $60B plan), traders expect reciprocal tension → large intraday swings.
Inflation Transmission & Central Bank Response: What You Need to Know
Trade restrictions = higher prices.
When tariffs increase the cost of imported Canadian goods (e.g., lumber, autos, dairy), those price increases flow through to U.S. consumers. This causes:
U.S. inflation expectations to rise → Forex traders bet on Fed hawkishness → USD gains strength across multiple pairs
Bank of Canada Dovishness If Canadian exports slow and GDP contracts, BoC may hold or cut rates → CAD weakens
Key takeaway for traders
Interest rate divergence between the Fed and the BoC widens → bullish USD/CAD trend develops.
Related Pairs and How They React to Tariffs
Tariffs don’t just affect USD/CAD. Because Canada is a commodity-heavy economy, the following pairs also show strong correlations during trade tension periods:
1. CAD/JPY (Risk-Off Proxy)
Why it matters
CAD is risk-sensitive and export-dependent.
JPY is a global haven.
How it reacts
Tariff escalation → global risk sentiment drops → JPY strengthens → CAD/JPY falls.
Trader takeaway
Short CAD/JPY during trade war escalations as a lower-risk volatility hedge.
2. AUD/CAD (Commodity Cross)
Why it matters
Australia and Canada are commodity-exporting countries, but Australia isn’t in a direct trade war with the U.S.
How it reacts
If Canadian tariffs depress the CAD and the AUD remains stable, this pair trends bullishly for the AUD.
Trader takeaway
Long AUD/CAD if Canadian export sectors show weakness and Australia avoids trade friction.
3. EUR/CAD (Relative Monetary Policy)
Why it matters
The ECB and Bank of Canada diverge during economic slowdowns.
How it reacts
If Canada’s economy weakens faster than Europe’s, EUR/CAD rises.
Trader takeaway
Monitor economic data and European response to U.S. tariffs for medium-term trades.
Real-World Example of USD/CAD Reaction to Tariff News
Let’s say the following sequence plays out:
Trump announces a 25% tariff on Canadian auto imports.
GoMoon.ai scores the headline as a 9/10 high-impact event.
Canadian equities drop at open, and GDP expectations are revised downward.
Bank of Canada responds with dovish commentary, hinting at rate holds
U.S. dollar strengthens due to capital inflows and hawkish Fed commentary
Result
USD/CAD surges from 1.35 to 1.39 within 48 hours.
CAD/JPY drops.
Volatility spikes.
Forex traders who acted on the tariff headline had 150–300 pip swing trade opportunities.
Using GoMoon.ai to Track Forex Moves From Tariffs
To stay ahead of the market, traders using GoMoon.ai can:
Set real-time alerts for keywords like “Trump tariffs Canada,” “steel export restrictions,” “BoC rate decision,” and “CAD reaction.”
Use the AI impact score to determine which headlines will likely trigger big moves in USD/CAD.
Replay similar events from past U.S.–Canada trade conflicts (e.g., 2018–2019 disputes) to recognize historical reaction patterns.
Track calendar events from both countries — such as GDP releases, inflation prints, and central bank pressers — and sync them with your trading schedule.
How These Tariffs Might Influence the Crypto Market
Tariffs Can Shift Risk Sentiment
When Trump imposes tariffs on allies like Canada, it disrupts global investor confidence. This is especially true when multiple retaliatory measures (like Canada's $60 billion counter-tariff) are announced, central banks become unpredictable in response to inflation, and significant commodity-exporting economies (like Canada) suffer shocks. For crypto traders, these dynamics create risk-off sentiment, often leading to short-term crypto selloffs as traders move to safety (USD, gold, or stablecoins). Volatility spikes in BTC and ETH due to correlation with tech stocks and the U.S. macro outlook. However, crypto assets—especially Bitcoin—tend to recover strongly as non-correlated macro hedges once markets adjust.
Crypto Can Hedge Against Inflation and Fiat Uncertainty
One of the significant second-order effects of tariffs is inflation. When U.S. consumers and companies face higher prices due to increased costs of Canadian imports (like lumber, auto parts, and aluminum), inflation pressure builds, and this affects crypto in three ways:
Bitcoin as an Inflation Hedge
Investors often treat BTC as digital gold when fiat currencies come under pressure. Cryptocurrency demand can spike if Trump’s tariffs contribute to higher CPI or PCE prints.
Canadian Investors Seeking Protection
If the Canadian dollar weakens and local equities drop, wealthy investors and funds may diversify into BTC or stablecoins to hedge against macro instability. Retail adoption may also rise, especially in provinces with high exposure to affected sectors (e.g., Ontario’s auto economy).
Increased Demand for Stablecoins
During trade wars, USDT and USDC become popular safe havens for traders who want to avoid volatility while remaining within the crypto ecosystem.
Ethereum and Altcoins: Higher Beta Reactions
While BTC may benefit from macro fear, Ethereum and other altcoins tend to show amplified volatility in both directions. Short-term risk-off tariff-driven fear leads traders to rotate out of ETH, SOL, AVAX, and other altcoins, causing prices to dip sharply. DeFi and NFT sectors (which rely on speculative liquidity) may see usage drop temporarily. Medium-term risk-on scenarios arise if markets price in eventual central bank easing to counter slowing global growth. In this case, risk assets like altcoins surge. A weakening U.S. dollar from debt and deficit concerns may increase crypto prices.
Technical Analysis Signals During Tariff Events
Tariff headlines generate sharp intraday sentiment shifts. Crypto traders should watch for breakout patterns on BTC/USD and ETH/USD after tariff-related news breaks. DXY (Dollar Index) divergence is also critical — if DXY weakens while BTC holds firm, it’s often a bullish signal. On-chain spikes in stablecoin inflows or exchange volume also indicate that traders are repositioning.
Regulatory Outlook: Crypto Policy as a Retaliation Tool?
Although not currently in effect, it’s plausible that Canada might use crypto-friendly regulation as a strategic move. Canada could strengthen fintech innovation and attract global crypto companies with favorable laws in response to U.S. aggression. Canadian crypto markets (and CAD-backed stablecoins, if developed) could gain traction if this happens. Crypto traders should watch Canadian government signals about blockchain or financial sovereignty. A pro-crypto policy shift could trigger altcoin or DeFi project rallies tied to Canadian developers or exchanges.
What the GoMoon Platform Does
GoMoon transforms economic calendar data with AI-powered insights for smarter trading decisions. Our platform analyzes global events and rates their market impact on a scale of 1-10, helping you understand how they'll affect various assets. We've packed everything traders need: Live economic event streaming, custom notifications, and historical event replay with TradingView charts. What sets us apart is our comprehensive approach to event analysis.
Whether you're tracking the impact of major economic announcements or comparing forecast data with actual outcomes, GoMoon provides clear, actionable insights. You can personalize your calendar, stream live meetings directly on the platform, and analyze historical events like the dot-com bubble or COVID-19 crash to understand market reactions better. GoMoon clarifies the complex world of economic events for traders seeking data-driven decisions. Get started for free to get AI-powered economic insights today.
Related Reading
What Can Forex and Crypto Traders Do to Stay Ahead? (Tactical Guide)
Anticipating the Trade War Before the Market Reacts
In a U.S.-Canada trade war, waiting for news to break before responding can lead to unwanted losses. High-stakes environments like this require anticipation, not reaction. Traders who profit consistently during macroeconomic disruption don’t just follow the news — they position for it before the wave hits. This section gives you a step-by-step plan to stay ahead using live intelligence, historical context, sentiment shifts, and precise technical setups — powered by GoMoon.ai.
Use GoMoon.ai to Anticipate and Respond in Real Time
GoMoon.ai is a trader’s best tool when navigating politically driven market catalysts like Trump’s tariffs on Canada. Here’s how to set it up for maximum edge:
Create Custom Alerts for Strategic Phrases
Set real-time alerts for keywords that signal impending volatility:
“Trump tariffs Canada”
“U.S. steel tariffs”
“Canadian counter-tariff”
“Trade war escalation”
“NAFTA suspension”
“Auto exports tax”
These alerts help you act before the market fully prices in the news.
Track AI Event Impact Scores
GoMoon.ai assigns a 1–10 score based on
How similar past events moved the market
Relevance to forex and crypto asset classes
Historical volatility correlations
How to use it
8–10 = Immediate opportunity: initiate trade setups
5–7 = Monitor sentiment, prep for potential entry
1–4 = Low impact: likely market noise
Replay Similar Market Events
Use GoMoon’s event playback to analyze how BTC, ETH, USD/CAD, and CAD/JPY responded to:
Trump’s 2018–2019 Canada tariffs
COVID-era disruptions to Canadian exports
Interest rate divergence periods between the BoC and the Fed
This helps recognize patterns and prepare precise trades.
Sync Event Calendar with Trading Hours
Align GoMoon’s macroeconomic calendar with your active trading schedule. Prioritize days with:
BoC or Fed speeches
Tariff announcement windows
Canada or U.S. GDP, CPI, or PMI reports
Strategic Trading Setups for Forex Traders
USD/CAD Trend Continuation Strategy
When to trade
After high-impact tariff or counter-tariff headlines
Setup
Wait for a significant support/resistance break on the 1H or 4H chart.
Confirmation tools
RSI divergence
GoMoon AI Score 8+
Sentiment analysis from GoMoon or Bloomberg terminals
Entry
On a candle close above/below the breakout level
Exit
Trail stop or TP at 1.5x ATR
CAD/JPY Risk-Off Momentum Trade
Why it works
JPY strengthens when markets panic; CAD weakens during trade turmoil.
Setup
Look for high-volume CAD/JPY support zone breakdowns after negative tariff news.
Indicators
Risk-off sentiment score from GoMoon
Weak Canadian equity or commodity data
Bonus tip
Combine with long gold/USD to hedge macro risk
AUD/CAD Divergence Play
Why it works
Both are commodity currencies, but only Canada is in Trump’s crosshairs.
Setup
Long AUD/CAD is when CAD reacts negatively to tariffs, but AUD remains stable.
Ideal condition
Iron ore and copper are rallying while Canada’s exports are strained
Strategic Trading Setups for Crypto Traders
BTC/USD Sentiment Bounce Strategy
When to trade
After tariff headlines spike U.S. inflation fears or Canadian dollar weakness
Setup Buy BTC on support when:
Stablecoin inflows rise
GoMoon score hits 9+
DXY weakens
Entry trigger
Bullish engulfing candle or bounce from 100-day EMA
Exit
First resistance or sentiment reversal
ETH/BTC Pair Rotation Trade
Why it works
ETH underperforms BTC during macro fear → then recovers faster in rebound.
Setup
Short ETH/BTC on news of retaliation, Buy ETH/BTC on return to market calm.
Stablecoin Dominance Tracker
Use GoMoon + CoinGlass data to:
Monitor rising USDT/USDC dominance = risk-off → hedge positions
Watch for sudden dips = risk-on return → prepare to long alts like SOL, MATIC, ARB
Practical Execution Tips
Size down during high-volatility hours; widen stop-losses to avoid whipsaws.
Set stop-losses below/above structure, not dollar-based values.
Use GoMoon AI score to decide position sizing (e.g., 1% on Score 6, 3% on Score 9).
Pair with fundamentals: Cross-check with macro data (CPI, GDP) and sentiment.
What the GoMoon Platform Does
GoMoon transforms economic calendar data with AI-powered insights for smarter trading decisions. Our platform analyzes global events and rates their market impact on a scale of 1-10, helping you understand how they'll affect various assets. We've packed everything traders need: Live economic event streaming, custom notifications, and historical event replay with TradingView charts. What sets us apart is our comprehensive approach to event analysis.
Whether you're tracking the impact of major economic announcements or comparing forecast data with actual outcomes, GoMoon provides clear, actionable insights. You can personalize your calendar, stream live meetings directly on the platform, and analyze historical events like the dot-com bubble or COVID-19 crash to understand market reactions better. GoMoon clarifies the complex world of economic events for traders seeking data-driven decisions. Get started for free to get AI-powered economic insights today.
Use Our AI-powered Economic Calendar Tool for Free Today
I'd be glad to help you write the content you requested. But first, I need some clarification on how you would like me to approach the topic of Trump Tariffs in 2025. Should I discuss the tariffs in an economic context or a political context? Or would you want me to address both these angles? GoMoon transforms economic calendar data with AI-powered insights for smarter trading decisions. Our platform analyzes global events and rates their market impact on a scale of 1-10, helping you understand how they'll affect various assets. We've packed everything traders need: Live economic event streaming, custom notifications, and historical event replay with TradingView charts. What sets us apart is our comprehensive approach to event analysis.
Whether you're tracking the impact of major economic announcements or comparing forecast data with actual outcomes, GoMoon provides clear, actionable insights. You can personalize your calendar, stream live meetings directly on the platform, and analyze historical events like the dot-com bubble or COVID-19 crash to understand market reactions better. GoMoon clarifies the complex world of economic events for traders seeking data-driven decisions. Get started for free to get AI-powered economic insights today.
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