The tariff story has played out before in the US and Canada over the last few months, but the recent tariff announcement by Pres. Trump on Canadian steel and aluminum seems a little bit more real. There still may be the question of the authority to do so. As such, Trump has declared a national emergency, giving him the power to do the "tariffing" (presumingly - it may be denied). He tweeted:

I will shortly be declaring a National Emergency on Electricity within the threatened area. This will allow the U.S to quickly do what has to be done to alleviate this abusive threat from Canada.

The action has the USDCAD moving higher and breaking above technical resistance.

Looking at the hourly chart above, the price of the USDCAD has moved outside of the consolidation Red Box with the upper extreme between 1.44487 and 1.4471. Breaking above is more bullish. That area is now support.

Going back to early February, the price has made tariff-induced breaks outside of this Red Box area (both on the topside and the downside depending on the respective news). Below is a summary of previous announcements on North American tariffs.

• March 6: Suspended many tariffs on Canada and Mexico.
• March 5: Paused tariffs on cars from Canada and Mexico for a month.
• March 5: Accused PM Justin Trudeau of imposing tariffs on the U.S. “to stay in power.”
• March 4: Imposed 25% tariffs on all imports from Canada and Mexico, and 10% tariffs on imports from China.
• March 1: Ordered an increase in U.S. lumber production.
• Feb. 27: Announced tariffs on Mexico and Canada would take effect on March 4.
• Feb. 3: Delayed tariffs on Canada.
• Feb. 3: Delayed tariffs on Mexico.
• Feb. 1: Officially announced tariffs on imports from Canada.
• Feb. 1: Officially announced tariffs on imports from Mexico.
• Jan. 21: Promised to impose tariffs on Canada and Mexico.

With Mark Carney taking over the Liberal leadership from PM Trudeau, Trump is likely thinking the time is right to bombard the new leader with the tough actions, especially with an election likely ahead. Trump likes to push and push (the art of the deal?) and if there is blood, a punch is thrown, or some vulnerability, he will respond.

In addition, as the puck was dropped following the Carney win over the weekend, Carney immediately dropped his gloves saying:

"America is not Canada. And Canada never, ever will be part of America in any way, shape or form. We didn’t ask for this fight, but Canadians are always ready when someone else drops the gloves. So Americans should make no mistake, in trade, as in hockey, Canada will win."

PS: Ontario premier Ford has responded saying: Canada will not back down until Pres. Trump's tariffs are gone for good.

PSS. On removing measures, Trump has added that "If other egregious, long-time tariffs are not likewise dropped by Canada, I will substantially increase, on April 2, the tariffs on cars coming into the US, which will essentially permanently shut down the automobile manufacturing business in Canada"