Trump announces last-minute deal with Canada delaying 50% tariffs
US President Donald Trump said a last-minute deal with Canada delays 50% tariffs on $20 billion worth of Canadian goods for three days. The announcement came less than two hours before the tariffs were due to take effect.
US President Donald Trump said on Tuesday he is pausing 50% tariffs that were set to hit $20 billion (€17.27 billion) worth of Canadian imports starting Wednesday at midnight. He posted the news on Truth Social less than two hours before the deadline, saying the two countries had reached a deal, pending finalisation of documents, that pauses the tariffs for a three-day period.
Had the tariffs taken effect as planned, they would have applied to a range of Canadian products, from hockey sticks to tongue depressors. Canada had warned it would retaliate with its own levies, risking a deeper trade dispute between the two countries, which exchanged $880 billion (€760 billion) in goods and services last year.
Canadian Prime Minister Mark Carney and Trump spoke twice by phone over the past two days, including a call on Tuesday afternoon, according to Carney's office, reflecting the intensity of last-minute negotiations. Both sides had strong incentives to avoid the tariffs: nearly 72% of Canada's goods exports last year went to the US, while a new US tariff ahead of November's midterm elections risked worsening the cost-of-living pressures already facing American consumers.
An unusual approach to a close ally
Trump has repeatedly imposed tariffs on Canadian goods as part of an effort to bring manufacturing back to the US, alongside inflammatory remarks suggesting Canada become the 51st US state. Last year he imposed broad import taxes on nearly every country, but the Supreme Court ruled in February that he had exceeded his authority, striking those tariffs down.
Seeking another legal avenue, Trump invoked Section 338 of the 1930 Tariff Act, which allows tariffs of up to 50% on countries found to discriminate against US businesses, without requiring a formal investigation. The provision has never previously been used. The move comes as Washington renegotiates the US-Mexico-Canada trade agreement, with the tariff threat giving the US leverage to seek further concessions from Canada.
