Tiff Macklem, the Bank of Canada Governor, delivered a dramatic message, stating that President Donald Trump’s actions are sharply undermining the US dollar’s appeal as a safe-haven asset. According to Macklem, Trump’s attempts to "fix" the Federal Reserve are causing many to question the independence of US monetary policy.

Since April, the dollar has tumbled by nearly 10%, putting its reputation as the world’s go-to safe-haven currency into serious doubt. Macklem wryly notes that the dollar still holds the number one spot only because “no one has come up with a better alternative yet.” In the meantime, its status as a reliable shelter in times of turmoil is now up for debate.

Macklem advises Canada’s authorities not to just watch while the US treats its currency like a ping-pong ball, but to urgently boost productivity and diversify into new foreign markets. As he puts it: “We should’ve started doing this 15 years ago”. Nevertheless, the time is ripe now.

In his view, trade tensions with the US have once again raised production costs and eroded Canada’s revenues. Neither rate cuts nor fiscal stimulus will fix this—only structural reforms can truly improve the situation.

In short, Macklem is sending a message to Washington: your “economic foxtrot” is not only crippling the US dollar, but also creating turbulence for your neighbors. Meanwhile, Canada has no choice but to rack its brains to find the solution.