Trump pauses new tariffs on Canada for three days, saying deal close
Trump Hits Pause on 50% Canadian Tariffs, Citing Near-Completion of Trade Agreement
Ninoda.com – US President Donald Trump announced on social media that he would hold off on imposing a sweeping 50% tariff on Canadian imports for a three-day window, explaining that the two nations are on the verge of finalizing a trade pact. The delay was declared less than two hours before the levy — covering roughly $20 billion (£14.8 billion; C$28 billion) worth of goods — was scheduled to take effect on Wednesday.
"I have paused the 50% Tariffs against Canada, that were scheduled to kick in tomorrow morning for a three day period, based on the fact that Canada and the U.S.A., subject to the finalization of documents, have a DEAL!"
A Deadline That Nearly Triggered a Trade War
The two governments had been locked in a standoff over multiple sticking points, most notably American tariffs on automobiles and the prohibition on US liquor sales enforced by most Canadian provinces. Since July, negotiators on both sides of the border have been locked in intensive discussions after Trump set a hard deadline of 19 August for the new levy. The president and Canadian Prime Minister Mark Carney held two phone conversations this week alone.
Carney acknowledged the momentum in a letter published on X, noting that meaningful headway had been achieved while cautioning that critical work remained unfinished.
"Substantial progress has been made, although there is important work still to be done."
What the Negotiators Still Must Resolve
According to a Reuters report drawing on anonymous sources, talks in the final hours before Wednesday's deadline centered on trimming the US tariff on Canadian-made vehicles from 25% down to 15%. The two sides, however, could not settle which specific vehicles would qualify for the reduced rate, with Washington insisting the concession apply only to cars containing a substantial share of American-made components.
Beyond autos, the US has pressed Ottawa to eliminate its remaining retaliatory duties on American vehicles and to recalibrate dairy quotas so that US cheese producers gain broader market entry. Separately, Washington has demanded that the ban on US alcohol sales — imposed last year by most provinces in retaliation for Trump's tariffs — be rescinded. Because liquor regulation falls under provincial jurisdiction rather than federal authority, Carney will require the consent of individual premiers before any such ban can be lifted. Ontario Premier Doug Ford, whose province bears the heaviest blow from US auto tariffs, indicated he would consider ending the liquor prohibition only if a "fair deal" materializes.
Keystone XL Enters the Equation
In the same social media post, Trump floated the possibility that a finalized agreement could resurrect the Keystone XL oil pipeline, a project linking Alberta to the United States that was shelved under both the Obama and Biden administrations. The line would transport 830,000 barrels of crude per day. Environmental advocates and Indigenous communities have long campaigned against the route, yet Trump has repeatedly expressed his desire to bring the project back to life.
"The great Keystone XL Pipeline, long ago killed by Sleepy Joe Biden, may be awoken from the grave!"
Broader Context and Business Reactions
Relations between the two largest trading partners in North America have deteriorated sharply since Trump reclaimed the White House in January of last year and launched an expansive global tariff programme that overturned decades of bilateral free trade between Canada and the US. The threatened tariffs would have layered on top of duties already in force on Canadian steel, aluminium, automobiles, and lumber, extending to wine, dairy products, cement, apparel, and hockey equipment.
Canadian negotiators and firms on both sides of the border greeted the pause as a welcome reprieve, having warned that the new duties would inflict damage on both economies. On Tuesday, the US Chamber of Commerce urged a swift resolution, cautioning in a public statement that elevated tariffs would harm both economies, inflate costs for American households, further disrupt vital supply chains, and jeopardize the 13 million US jobs tied to commerce under the US-Mexico-Canada Trade Agreement.
US Trade Representative Jamieson Greer's office outlined the expected scope of the deal in a post on X, describing it as encompassing "comprehensive market access for all American goods, economic security commitments, digital trade alignment," alongside "many important provisions that will continue to protect our market and American workers, along with our Canadian partners."
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