U.S. President Donald Trump declared a three‑day delay in imposing new tariffs on a broad range of Canadian goods as the two countries continue efforts to finalize a trade deal. The decision was made less than two hours before a 50% tariff on nearly $20 billion (£14.8 billion; C$28 billion) worth of Canadian imports was due to take effect.
“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,” Trump stated.
Negotiations remain stalled on several issues, including U.S. tariffs on automobiles and restrictions in Canadian provinces on American liquor sales. Senior trade officials from both nations met Wednesday in Washington following Trump’s decision to pause the tariffs, signaling that discussions toward a potential deal are ongoing.
Trump described the agreement as ‘very good’ for both countries, noting that it would involve Canadian concessions in agriculture and manufacturing, along with reductions in certain U.S. tariffs. Trade negotiations have been ongoing since July, following Trump’s threat to impose new levies by August 19. He also indicated that a finalized deal could revive the Keystone XL pipeline project, which would connect Alberta to the United States but was previously blocked under the Obama and Biden administrations.
According to the U.S. Trade Representative’s office, the agreement is expected to provide “comprehensive market access for all American goods, economic security commitments, and digital trade alignment.”
Tensions between the United States and Canada have escalated since Trump’s return to office in January last year, when he introduced a broad global tariff program that disrupted decades of free trade between the two countries. The latest proposed tariffs targeted Canadian imports such as wine, dairy products, cement, clothing, and hockey equipment, in addition to existing U.S. duties on Canadian steel, aluminum, automobiles, and lumber.
Canada has been seeking an agreement under which the U.S. would remove or reduce tariffs on these critical sectors. In return, the U.S. has called for several concessions from Canada, including the removal of its remaining retaliatory tariffs on American vehicles and changes to dairy quotas to provide greater market access for U.S. cheese producers.
Washington has also pressed Canada to lift restrictions on U.S. alcohol sales, which were imposed by most Canadian provinces last year in response to Trump’s tariff measures.
On Wednesday, negotiators discussed reducing U.S. tariffs on Canadian automobiles from 25% to 15%, according to Reuters. However, the two sides could not agree on which vehicles would qualify, with Washington insisting the reduction apply only to cars containing significant American‑made components.
Canadian Prime Minister Mark Carney also needs support from provincial leaders to restore sales of US alcohol, which falls under provincial jurisdiction. Ontario Premier Doug Ford, whose province has been most affected by auto tariffs, stated he would consider lifting the ban if a fair agreement is reached.
On Tuesday, the U.S. Chamber of Commerce urged both sides to finalize a deal, warning that higher tariffs could raise costs, disrupt supply chains, and threaten millions of U.S. jobs dependent on trade under the U.S.-Mexico-Canada Trade Agreement.
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