President Donald Trump announced a three-day pause on 50 percent tariffs targeting Canadian goods, citing a last-minute trade agreement framework. The decision came less than two hours before the levies were scheduled to take effect at 12:01 a.m. ET.
"Canada and the U.S.A. subject to the finalization of documents, have a DEAL," Trump posted on Truth Social.
Canadian Prime Minister Mark Carney spoke with Trump on Tuesday and Monday, according to the announcement. Canada-U.S. Trade Minister Dominic LeBlanc then engaged directly with U.S. Trade Representative Jamieson Greer and Commerce Secretary Howard Lutnick to finalize the agreement.
The pause masks persistent disagreements on core issues. Sources familiar with the negotiations said the two countries remained divided over whether tariffs would apply to Canadian automobiles entering the U.S. market and how existing tariffs on industrial products would be handled.
Canada seeks U.S. elimination of the proposed Section 338 tariffs and reduction of existing Section 232 tariffs on steel, aluminum, autos and lumber. The Trump administration has demanded removal of Canada's retaliatory tariffs on U.S. autos and reinstatement of U.S. liquor sales in provincially run Canadian stores.
Canadian liquor producers, hockey equipment manufacturers, and wood and paper producers would have faced the new tariffs. A senior Canadian government official said Canada was preparing potential retaliatory tariffs should the U.S. levies take effect.
The Trump administration initiated the tariff sequence last year. Canada then imposed tariffs on U.S. goods in response, prompting Trump's threat of the 50 percent levies announced this week.
The United States accounted for nearly 72 percent of Canadian goods exports last year, making trade disruption costly for Canadian industries. The three-day window provides a narrow timeframe to resolve document language and avert implementation.
