Trump's tariffs impact the Canadian economy, but Bitcoin holders may come out on top

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The Royal Bank of Canada (RBC) described the impact of Trump's actions as "the largest trade shock in nearly a century."

During the trade war, the Canadian "dollar" plummeted while Bitcoin soared

U.S. President Donald Trump imposed a 25% tariff on all goods from Canada and Mexico on Saturday, causing chaos in the smaller northern economy as the Canadian dollar (CAD) to U.S. dollar (USD) exchange rate fell to its lowest level in 22 years.

Canada and the U.S. are each other's largest trading partners. Data from the U.S. Department of Commerce shows that trade between the two countries is approaching $773 billion by the end of 2023. The two countries share the longest border in the world—nearly 5,526 miles long—and may be the two most integrated economies in the world, with a trade relationship spanning 170 years.

However, Trump has been warning for months that the U.S. would impose a 25% tariff on all Canadian goods, except for Canadian oil, which would only be subject to a 10% tariff. According to Reuters, this caused the CAD to USD exchange rate to drop to 1.4793 on Monday, meaning Americans only need to spend 68 cents to buy one Canadian dollar.

However, while the CAD continues to languish, the portfolios of Canadian Bitcoin holders have seen growth as the price of Bitcoin (BTC) surged to over $100,000, trading at $102,170, according to Coingecko data, having increased by 4.8% in the past 24 hours as of the time of writing.

Pierre Poilievre, leader of the Conservative Party of Canada, stated during a speech on Sunday: "We must put Canada first. That is why sensible conservatives condemn President Trump's imposition of massive, unfair, and unreasonable tariffs that will harm both the U.S. and Canadian economies."

As of the time of this report, Trump has met with the leaders of Mexico and Canada and agreed to temporarily suspend the tariffs for 30 days.

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