Trump postpones 50% tariffs on Canada by three days: “We have a deal,” with $20 billion in imports at stake

Donald Trump has postponed for three days the implementation of new 50% tariffs on a large number of goods from Canada, as Washington and Ottawa work to finalize a trade agreement.

The announcement from the American president came less than two hours before the measure was set to take effect, which would have covered around $20 billion worth of Canadian imports.

“I have suspended the 50% tariffs on Canada, which were due to take effect tomorrow morning, for a three-day period, based on the fact that Canada and the U.S., pending finalization of documents, have a deal,” Trump wrote on social media.

This week, Trump and Canadian Prime Minister Mark Carney have spoken twice. Meanwhile, negotiating teams from both countries have been holding intensive talks since July.

Carney acknowledged that the sides have made significant progress, but stressed that the process is not yet complete.

“Considerable progress has been made, although there is still important work to be done,” the Canadian prime minister said.

The tariffs announced by Trump would have applied to a wide range of Canadian goods, including wine, dairy products, cement, clothing and hockey equipment.

These measures would have been added to duties the U.S. has already imposed on steel and aluminum, vehicles and lumber coming from Canada.

The Office of the U.S. Trade Representative said the potential agreement envisions greater opening of the Canadian market to American products, commitments on economic security and alignment of positions on digital trade.

At the same time, Washington is seeking the removal of Canadian retaliatory tariffs on American vehicles. Also on the table is changing dairy quotas, with the goal of giving U.S. producers broader access to the Canadian market.

The sides are also addressing the ban on selling American alcohol in some Canadian provinces. These measures were adopted last year in response to tariffs imposed by Trump.

A final agreement, according to the American president, could also create conditions for reviving the Keystone XL gas and oil pipeline project, which would link the Canadian province of Alberta with the U.S.

Keystone XL has been opposed for years by environmentalists and Indigenous groups, while the Obama and Biden administrations had blocked the project. Trump described the possibility of its return as pulling Keystone XL out of the “grave.”

According to Reuters, in the final hours of talks, negotiators were considering the possibility that U.S. tariffs on Canadian vehicles could be reduced from 25% to 15%.

However, the U.S. and Canada had not yet reached agreement on the categories of vehicles that would benefit from the reduction. Washington wants the lower tariff to apply only to cars containing a high percentage of American-made components.

Carney must also obtain approval from Canadian provinces for the return of American alcohol to the market, since decision-making on this issue belongs to provincial authorities, not the federal government.

The U.S. Chamber of Commerce has urged the parties to reach an agreement. It has warned that raising tariffs would harm both countries’ economies, increase costs for American consumers and disrupt supply chains.

With the three-day suspension of tariffs, U.S. and Canadian negotiators gain additional time to close the trade deal that has been the subject of extensive discussions.