President Donald Trump late Tuesday paused 50% tariffs on about $20 billion of Canadian imports for three days, less than two hours before they were due to take effect, saying Washington and Ottawa "have a DEAL" pending final paperwork.
Trump Announces Last-Minute Tariff Reprieve
"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 wrote on Truth Social. The announcement followed two calls with Canadian Prime Minister Mark Carney this week.
Carney struck a more cautious tone, saying "substantial progress has been made" but "important work" remained. The reprieve runs through Friday, Aug. 21. The United States Trade Representative (USTR) said the emerging accord would cover market access, economic security and digital trade.
The threatened duties covered roughly 5.2% of the $382 billion in goods the U.S. imported from Canada in 2025 and targeted products including wine, cement, dairy goods and hockey equipment. They also would have applied to qualifying USMCA goods, while energy, potash, fish and critical minerals remained exempt. Carney had previously warned Ottawa had a "full range" of responses ready.
Auto Tariffs Remain Major Sticking Point
Trump invoked Section 338 of the Tariff Act of 1930, marking its first known use in nearly a century. The law allows the president to impose tariffs of up to 50% on imports from countries found to discriminate against U.S. commerce. The rarely used provision had already raised concerns about a broader trade-war precedent.
Autos remain a major unresolved issue. Reuters reported the sides discussed cutting U.S. Section 232 tariffs on Canadian vehicles to 15% from 25%, while Washington wants deductions tied only to U.S.-made content. Canada has pushed to count Canadian and Mexican components as North American content. The dispute had previously pushed Carney to describe negotiations as "nasty."
Keystone XL Returns As Deadline Nears
Trump also revived another cross-border flashpoint, saying the Keystone XL pipeline "may be awoken from the grave!" He provided no details. Canadian energy exports were excluded from the threatened tariffs, a carveout that has limited the immediate impact on U.S. energy supplies.
The Associated Press notes that the countries traded about $880 billion in goods and services last year, while nearly 72% of Canada's goods exports went to the U.S. The pause averts an immediate escalation, but Friday becomes the next deadline.
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