Trump pauses 50% tariffs on Canada, says deal reached

President Donald Trump announced late Tuesday night that he would pause 50% tariffs on Canadian goods for three days, citing progress toward a trade agreement between the two countries just hours before the levies were set to take effect.

"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!" Trump wrote on Truth Social. He added that the Keystone XL Pipeline, cancelled under former President Joe Biden, "may be awoken from the grave."economictimes+1

The tariffs, which would have targeted approximately $20 billion worth of Canadian imports including cement, hockey sticks, building materials and certain clothing, had been scheduled to take effect just after midnight on August 19.nbcnews+1

Last-Minute Negotiations

The pause followed days of intense negotiations in Washington. Prime Minister Mark Carney spoke with Trump twice in two days, including Tuesday afternoon, hours before the deadline. Carney had described the talks as "very delicate and intense" on Monday.nbcnews+1

Canada-U.S. Trade Minister Dominic LeBlanc and Chief Negotiator Janice Charette met with U.S. Trade Representative Jamieson Greer and Commerce Secretary Howard Lutnick at the Department of Commerce on Monday, with LeBlanc saying afterward, "Our job is not yet done."bnnbloomberg

A key sticking point in the talks appeared to be automobile tariffs. Canadian negotiators sought to reduce the current 25% U.S. tariff on Canadian vehicles to 15%, while disagreements persisted over whether tariff reductions should be based solely on American content or all North American parts, according to Bloomberg and Reuters.nbcnews

Broader Stakes

The threatened tariffs would have been the first-ever use of Section 338 of the Tariff Act of 1930, which allows duties of up to 50% on trading partners deemed to discriminate against U.S. commerce. U.S. Trade Representative Greer had framed the tariffs as retaliation for Canada's counter-tariffs against prior U.S. levies.nbcnews

The U.S. Chamber of Commerce warned Tuesday that "the introduction of higher tariffs would damage both economies, drive up costs for U.S. families, further disrupt critical supply chains, and risk the 13 million American jobs that depend on" the U.S.-Mexico-Canada Agreement.bnnbloomberg+1

Prime Minister Carney's office did not immediately respond to requests for comment on the announced deal. The three-day extension sets a new deadline of Friday for the two sides to finalize an agreement.nbcnews