US and Canada strike trade deal, averting steep tariffs

US President Donald Trump has announced a new trade agreement with Canada that prevents a steep increase in tariffs on Canadian goods destined for the American market.

The announcement came just before a midnight deadline, at which point a 50 percent duty on Canadian exports was due to take effect. Such a tariff would have significantly raised the cost of Canadian goods entering the US market and added strain to relations between the two closely linked neighboring economies.

Trump publicly announced the agreement, emphasizing that it would allow both countries to avoid the steep tariffs that had been threatening Canadian exporters. Trade talks between the two nations have been tense in recent times, as the US administration has repeatedly used tariff threats as leverage in negotiations with various partners, including close allies.

Detailed terms of the agreement have not yet been made public, but the fact that a deal was reached just before the deadline suggests intense last-minute negotiations between representatives of both countries.

The US and Canada are among the world's largest trading partners, and any changes to tariff policy can affect a wide range of goods and services, from industrial raw materials to consumer products. The looming tariff had created uncertainty for businesses and market participants in both countries.