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Silver Breaks Higher as Trump Reignites North American Trade Tensions
Commodity
Traders' Opinions
Summary:
President Trump’s announcement of a sweeping 35% tariff on Canadian imports has reignited trade war anxieties and cast a shadow over U.S.-Canada economic ties.
Buy
PENDINGXAGUSD
EXP
37.700
Entry Price
40.000
TP
36.600
SL
38.411 +1.424 +3.85%
--
Point
PENDING
36.600
SL
CLOSING
37.700
Entry Price
40.000
TP
In a striking escalation of North American trade tensions, former U.S. President Donald Trump announced a hefty 35% tariff on Canadian imports, reigniting fears of a renewed trade war and threatening to destabilize what has historically been one of the most stable economic relationships in the world. The announcement, delivered via Trump’s favored platform, Truth Social, took markets by surprise and immediately injected a dose of geopolitical risk into investor sentiment, already wary of global headwinds.
The move comes at a sensitive time for both economies. Canada, already grappling with domestic inflation pressures and a slowing housing market, now faces the potential of a significant export drag, while the United States risks alienating one of its top trading partners. U.S.-Canada bilateral trade in goods and services exceeds $800 billion annually, making Canada one of America’s largest export markets.
Trump’s decision marks a sharp departure from recent efforts by the Biden administration to mend and modernize North American trade ties through collaborative channels such as the U.S.-Mexico-Canada Agreement (USMCA). Trump, however, justified the tariff by accusing Canada of "unfair practices" and failing to align with U.S. strategic interests—though specifics were notably sparse. Analysts believe the move is more political than economic, as Trump continues to push a populist agenda ahead of the 2024 election cycle.
For Canada, the economic implications are immediate. A 35% levy on exports ranging from raw materials to finished consumer goods threatens to disrupt cross-border supply chains and place additional pressure on industries already facing tight margins. Steel, lumber, and agricultural sectors are expected to be among the hardest hit, with ripple effects potentially flowing through North American manufacturing.
Markets responded with caution. The Canadian dollar weakened slightly against its U.S. counterpart, while major equity indices in Toronto posted modest declines. Investors fear that this latest tariff salvo could spark retaliatory measures from Ottawa, reminiscent of the tit-for-tat dynamic seen during Trump’s previous term.
"While it's too early to assess the full impact, the optics are troubling," said Hannah McAllister, head of global trade strategy at Northwood Capital. "We’re seeing a re-emergence of the kind of unilateralism that eroded confidence during the 2018–2020 trade skirmishes."
As trade tensions re-enter market narratives, safe-haven assets are starting to show renewed strength — and silver is no exception. The precious metal rose sharply during the latest intraday session, breaking above the critical resistance level at $37.30. The move was driven by a combination of risk-off flows and strong technical tailwinds.
TECHNICAL ANALYSIS
From a chart perspective, silver’s bullish bias remains intact. Prices have been hugging a rising bias line that has acted as dynamic support throughout the rally. In the latest session, the Relative Strength Index (RSI) flashed further upside signals, even as it approached overbought territory — an indication that momentum remains firmly in favor of the bulls.
The breakout above $37.30 is significant, not only because it breaches a key psychological threshold but also because it clears the way for a potential test of the $38.50 and $40.00 zones — the latter representing the highest levels seen since the 2020 stimulus-driven rally.
Traders should remain mindful of short-term consolidation risks, especially with the RSI nearing extremes. However, unless price action decisively falls below the $36.50 support zone, dips are likely to be bought, with market sentiment increasingly skewed toward precious metals amid geopolitical uncertainties and tariff-driven macro disruptions.
TRADE RECOMMENDATION
BUY SILVER
ENTRY PRICE: 37.70
STOP LOSS: 36.60
TAKE PROFIT: 40.00
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