Canada tariffs put loonie, supply chains in focus as trade war deepens

Investing.com -- Canada's C$27.6 billion retaliation against U.S. imports took effect on Tuesday, putting the Canadian dollar and North American supply chains under fresh pressure as investors assessed the risk that a widening trade war will drive up costs and disrupt cross-border commerce. The tariffs, covering more than 700 U.S. products, add a new layer of uncertainty for Canadian manufacturers and consumers while keeping the loonie vulnerable to shifting expectations for economic growth and interest rates. Immediate impact and trade war math USD/CAD jumped 0.27% to 1.3876, as the loonie hit its weakest since August 19. Futures traders quickly priced in higher odds of a Fed rate hike, while U.S. inflation data came in at 3.7% annualized. Supply chain shockwaves: commodities in the crossfire Copper's move: FreeportMcMoRan Inc stock rose 7.4% after LME copper futures hit an all-time high, driven by speculative buying and fears of U.S. tariffs on refined copper. LME copper warehouse inventories are down 40% since late May, amplifying price moves. Read more (Sep 7, 2026) Oil market tension: The Pentagon's rare direct stake in a North American oil venture and recent OPEC meetings signal energy security is now a national priority. Read more (Aug 29, 2026) Winners, losers and what's next Ticker Company Sector Recent Move Take USD/CAD USD/CAD FX FX +0.27% Loonie under pressure—tariffs, inflation, Fed risk Copper (HG) Copper Materials ATH: $14,694/ton Tariffs + low supply = elevated price risk FreeportMcMoRan Inc Freeport Materials +7.4% Leverage to copper, but volatility risk high Crude Oil (CL) Crude Oil Energy - Strategic stakes, OPEC in focus, volatility up S&P 500 S&P 500 Index -0.4% Trade war = market drag, but not full panic Insights U.S. and Canadian manufacturing, agriculture, and energy are all in the line of fire. Shipping and rail companies like Union Pacific Corporation are seeing fuel surcharges rise as energy prices respond to trade and war shocks. Read more (Aug 27, 2026) Analysts are watching the September 8 tariff start date for a potential second leg down in the loonie and further commodity volatility. Macro picture: economic data flashes yellow Canada's Ivey PMI jumped to 64.3, but employment fell by 41.7K jobs and unemployment stayed at 6.4%—signs of stress beneath the surface. U.S. inflation remains sticky (core PCE 3.3%), keeping the Fed hawkish and amplifying currency and commodity swings. Historical perspective: how bad can it get? The last major U.S.-Canada trade war (steel/aluminum, 2018) caused sector-specific pain but not a global recession. This round is broader, with both sides targeting more products and higher tariff rates—raising the risk of lasting supply chain disruptions and input cost inflation. This article was generated with the support of AI and reviewed by an editor. For more information see our T&C. Related articles Canada tariffs put loonie, supply chains in focus as trade war deepens Citi pushes back Fed rate cuts to May after blowout January jobs report These 2 stocks are best positioned to benefit from higher uranium prices: analyst