The Canadian dollar recouped much of its earlier decline against the greenback on Tuesday as investors assessed the chances of U.S. President Donald Trump carrying out a threat to impose a hefty tax on imports from Canada next month.

Trump was quoted saying his team was thinking of tariffs around 25% which could be announced on Feb. 1 but offered no other specifics.

The focus on American prosperity and national security is the latest pivot by Canadian officials as the country tries to find its footing with the new Trump administration, and - more urgently - avert the threat of blanket 25% import tariffs imposed by the US, its largest trade partner and closest ally.