By Michael O’Neill

The petulant President was already sulking after King Charles invited Prime Minister Trudeau for dinner at Sandringham and then extended an invitation to Ukrainian President Volodymyr Zelensky to dine at his Norfolk estate. Donnie thought he was the special one.

Then, things took a turn for the worse. The self-described Man with the Midas Touch, who once declared, “Everything I touch turns to gold,” on an episode of The Apprentice in 2004, managed to turn Wall Street into something stinky and brown. An estimated $8 trillion was wiped off the value of the big three indexes (DJIA, S&P 500, NASDAQ).

As if that wasn’t enough, this is the same man who once told Fox News, “You know, I’m, like, a smart person,” yet somehow thinks now is the perfect time to slap tariffs on paper products—just when the markets could really use some.

Dougie at Bat

Ontario Premier Doug Ford finally had enough of President Trump’s tariff games. One day, tariffs were imposed. A few days later, they were delayed. Then, a fresh wave of threats followed. The chaos was relentless, and Ford decided it was time to hit back.

On March 10, Ontario imposed a 25% surcharge on electricity exports to the U.S. The measure affected about 1.5 million people in New York, Michigan, and Minnesota, translating to a $100/month increase for businesses and households—just 0.43% of the U.S. population. Ford made it clear: this wasn’t about punishing Americans. He blamed Trump directly and warned that Ontario was prepared to increase the charge or even cut off electricity exports entirely if the trade war escalated. Trump took note.

Trumpster Fire

Trump responded with all the restraint of a toddler denied a Happy Meal. In a scorched-earth tirade, he not only threatened a full-blown trade war but also vowed to permanently shut down Canada’s auto industry by slapping massive tariffs on Canadian-made cars.

He wrote on his DelusionalSocial account:

“Based on Ontario, Canada, placing a 25% Tariff on “Electricity” coming into the United States, I have instructed my Secretary of Commerce to add an ADDITIONAL 25% Tariff, to 50%, on all STEEL and ALUMINUM COMING INTO THE UNITED STATES FROM CANADA, ONE OF THE HIGHEST TARIFFING NATIONS ANYWHERE IN THE WORLD. This will go into effect TOMORROW MORNING, March 12th. Also, Canada must immediately drop their Anti-American Farmer Tariff of 250% to 390% on various U.S. dairy products, which has long been considered outrageous. 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. If other egregious, long-time Tariffs are not likewise dropped by Canada, I will substantially increase, on April 2nd, the Tariffs on Cars coming into the U.S., which will, essentially, permanently shut down the automobile manufacturing business in Canada.

“This tweet practically reads like Trump channeling Gunnery Sergeant Hartman in Full Metal Jacket—loud, aggressive, and completely unhinged. (Here’s the proof— https://www.youtube.com/watch?v=tHxf17yJsKs )

Loonie Shocked

USDCAD was happily drifting in the 1.4000 area, expecting a quiet day. The lack of actionable U.S. or Canadian economic data and Wednesday’s Bank of Canada monetary policy meeting was enough incentive to sideline traders.

Then Trump tweeted, and USDCAD exploded higher, rising to 1.4521 before retreating to 1.4484. The S&P TSX index fell from 24,385 to 24,158 before rebounding to 24,267, while the CAD/U.S. 10-year yield differential widened to -126.5 from -121.5.

But that was it. Even in the face of a no-holds-barred trade war, USDCAD is showing amazing resilience.

The reason? USDCAD is a relatively minor currency in the global FX market. Domestic drama—even Trump-induced chaos—is often overlooked unless it ties into broader macro trends

Case in point: Global risk sentiment took a turn for the better after a headline stated that Ukraine and the U.S. have agreed to a 30-day ceasefire. USDCAD dropped right back to its pre-Trump tweet level thanks to broad U.S. dollar weakness.

Traders and analysts aren’t fixated on Canada. They’re far more concerned with Trump’s tariff war against China and Europe, which has real consequences for the U.S. economy. Trump’s move to double tariffs on Canadian steel and aluminum to 50% only reinforced the market’s worst fears—that he doesn’t understand (or doesn’t care) that Canada is America’s largest supplier of both products.

Investors are not blind. They see Trump’s actions for what they are—growth-killing policies that hurt Americans just as much as they hurt other countries. In the short term, this trade war raises U.S. recession risks and undermines investor confidence.

USDCAD dodged a bullet today. Perhaps seeing the bloodbath on Wall Street, U.S. Commerce Secretary Howard Lutnik extended what Doug Ford called “an olive branch.” As a result, Ford agreed to meet with Lutnik in Washington on March 12 and suspended the electricity surcharge—for now.

But as long as Trump continues to rule by tariff tantrum, USDCAD will remain a wild ride.