Canada is the second-largest trading partner for the United States (just recently surpassed by China). In 2017, U.S. exports to Canada were more than $340 billion and imports from Canada totaled more than $332 billion.

On January 1, 2017, the exchange rate between the Canadian dollar and the U.S. dollar was 1.34 Canadian dollars = 1 U.S. dollar. On January 1, 2018, the exchange rate was 1.26 Canadian dollars = 1 U.S. dollar. Explain how this change in exchange rates could impact U.S. consumers and firms?