Trump pauses new Canada tariffs as trade deal nears completion
US President Donald Trump delays a 50% tariff on nearly $20bn of Canadian goods for three days and hints at reviving the Keystone XL pipeline project.
Stock photo for illustration only, not from the actual event
- Donald Trump delays 50% tariffs on Canadian imports for a three-day period.
- Both nations are closing in on a trade agreement following intensive talks.
- The potential trade deal could revive the stalled Keystone XL oil pipeline.
- Canadian Prime Minister Mark Carney reports substantial progress in negotiations.
US President Donald Trump announced a three-day delay on the implementation of new sweeping tariffs targeting a wide variety of Canadian products, as trade officials work to finalize an agreement. The announcement came less than two hours before a planned 50% levy on nearly $20 billion, or 28 billion Canadian dollars, worth of imports was scheduled to take effect.
Bilateral trade tensions have escalated since Trump returned to office in January of last year, disrupting decades of established free trade between the neighboring countries through a series of global tariff programs. The latest duties threatened by Washington targeted Canadian goods including wine, dairy, cement, apparel, and hockey equipment, supplementing existing levies already placed on steel, aluminum, automobiles, and lumber.
Negotiators from both nations previously hit roadblocks over several contentious points, including US automotive tariffs and provincial bans on American liquor sales across Canada. Trump and Prime Minister Mark Carney held two phone discussions this week amid intensive negotiations that began in July after the US administration threatened the new duties with an August 19 deadline.
Stock photo for illustration only, not from the actual event
"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!"
Furthermore, Trump stated on social media that the final trade pact could clear the way for reviving the Keystone XL oil pipeline project. The cross-border infrastructure project connecting Alberta to the United States was previously blocked under the Obama and Biden administrations. Despite longstanding opposition from environmental and indigenous groups, Trump has repeatedly expressed his desire to restart the pipeline, which would transport 830,000 barrels of oil daily.
The ongoing trade negotiations involve complex technical stipulations, particularly concerning the domestic content thresholds required for automobile tariff exemptions and the decentralization of liquor sales across Canadian provinces. Prime Minister Mark Carney will need legislative cooperation from provincial leaders, such as Ontario Premier Doug Ford, to formally lift the ban on American alcohol sales in exchange for a balanced economic pact.
Prime Minister Mark Carney noted in a statement posted on X that substantial progress has been achieved, though important tasks remain ahead. Meanwhile, the US Chamber of Commerce urged both governments to secure an agreement, warning that increased tariffs would damage both economies, inflate costs for American households, disrupt critical supply chains, and jeopardize millions of jobs tied to the regional trade framework.
Source: BBC Business
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