President Donald Trump late Tuesday paused a wave of 50 percent tariffs set to hit Canada at midnight. The duties, which would have affected approximately $20 billion worth of U.S. imports from Canada, are now on hold for three days.
Trump announced the decision on social media, writing: "I have paused the 50% Tariffs against Canada, that were scheduled to kick in tomorrow morning for a three day period, based on the fact that Canada and the U.S.A. subject to the finalization of documents, have a DEAL!" He mentioned the Keystone XL pipeline, stating it "may be awoken from the grave!"
The Office of the U.S. Trade Representative said the agreement will include comprehensive market access for all American goods, economic security commitments, digital trade alignment, and provisions designed to protect the U.S. market and American workers.
Canadian Prime Minister Mark Carney confirmed the three-day pause, extending through Friday. "Substantial progress has been made, although there is important work still to be done," he said.
The tariffs would have struck hockey sticks, building materials, liquors, and clothing. They represented the first use of Section 338 of the Tariff Act of 1930, which grants the White House authority to impose tariffs up to 50 percent on trading partners found to discriminate against U.S. commerce.
The last-minute agreement followed more than a week of intense meetings between U.S. and Canadian officials. Carney had described Monday's discussions with the Trump administration as "very delicate and intense." He and Trump spoke late Monday and again late Tuesday.
Carney previously called the threatened duties a "direct violation" of the U.S.-Canada-Mexico Agreement that Trump signed during his first term. The disagreement reflected deep tension in the trade relationship.
The U.S. Chamber of Commerce warned Tuesday that higher tariffs would damage both economies, increase costs for American families, disrupt critical supply chains, and jeopardize the 13 million American jobs dependent on North American trade.
Canadian officials also pushed to lower existing Section 232 tariffs on steel and aluminum. Carney said Canada's goal was to "deliver greater certainty and real benefits for Canadian businesses, workers, farmers and families."
