Trump pauses new tariffs on Canada for three days, citing near-finished trade deal

US President Donald Trump has announced a three-day pause on new 50% tariffs that were due to take effect against a wide range of Canadian goods, saying the delay comes as the two countries finalize a trade agreement. The announcement, posted on social media, came less than two hours before the tariffs on nearly $20bn of Canadian imports were set to take effect.

Trump said the deal is essentially done, subject to finishing the necessary documents. He and Canadian Prime Minister Mark Carney spoke twice this week, following intense negotiations between trade officials since July, after Trump had set 19 August as the deadline for the new tariffs.

The two sides had been at odds over several issues, including US tariffs on autos and bans by several Canadian provinces on American liquor sales. Trump also mentioned the possibility of reviving the Keystone XL pipeline, which would carry oil from Alberta to the US and had been blocked by both the Obama and Biden administrations. The project has long faced opposition from environmental and indigenous groups.

Sticking points

The threatened tariffs would have applied to goods including wine, dairy, cement, clothing and hockey equipment, adding to existing US tariffs on Canadian steel, aluminium, autos and lumber. Canada had been seeking to have these tariffs dropped or reduced, while the US had asked Canada to remove its retaliatory auto tariffs, expand quotas for American cheese producers, and lift the ban on US alcohol sales.

In the hours before the deadline, negotiators reportedly discussed cutting US auto tariffs from 25% to 15%, but could not agree on which vehicles would qualify, with the US pushing to limit eligibility to cars with substantial American-made content. Carney will also need agreement from provincial premiers to lift the alcohol ban, since liquor sales fall under provincial control. Ontario Premier Doug Ford said he would support ending the ban only if a fair deal is reached.

The US Chamber of Commerce had urged both sides to reach an agreement, warning that higher tariffs would hurt both economies and put millions of jobs tied to trade under the US-Mexico-Canada Agreement at risk.