The Canadian dollar fell to around 1.38 per US dollar from a three-month high of 1.376 on August 21st as the US-Canada trade war intensified following the collapse of negotiations. US President Donald Trump said that tariffs on all Canadian cars, trucks, automotive parts and steel would rise to 50% on January 1, 2027. This was after Prime Minister Mark Carney vowed to retaliate the initial series of tariffs by the US that were imposed after trade talks fell through. Washington imposed 50% tariffs on furniture, plastics, plywood and electrical equipment, adding to existing 25% tariffs on steel, lumber and autos. Risks to growth from higher tariffs reduced the argument for a rate hike by the Bank of Canada this year, even though elevated energy prices threatened a pickup in inflationary risks.