United States President, Donald Trump, has postponed plans to impose a 50 per cent tariff on a range of Canadian imports, giving the two countries three additional days to conclude ongoing trade negotiations.
Trump announced the decision on Tuesday night, saying the tariffs, which were scheduled to take effect early Wednesday, had been suspended until August 21.
The move is expected to spare about $20bn worth of Canadian goods from the proposed duties.
“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 also referred to the Keystone XL pipeline, saying it “may be awoken from the grave!” without giving further details about the proposal.
The planned tariffs would have affected Canadian products including dairy, alcohol, furniture, clothing, plastics and industrial equipment.
They represented about five per cent of the total value of US imports from Canada last year.
Canadian Prime Minister, Mark Carney, confirmed the postponement, saying the negotiations had made significant progress but that more work remained.
“Substantial progress has been made, although there is important work still to be done,” Carney said.
The decision followed several days of discussions between officials from both countries.
Carney and Trump spoke by phone on Monday and Tuesday as efforts continued to resolve their wider trade dispute.
Trump had planned to impose the duties under Section 338, a little-known US trade law dating back to the 1930s that has never previously been used in this manner.
The proposed measure was expected to face legal challenges.
Unlike some of Trump’s other recent tariffs, the proposed Canadian duties would not have included exemptions for products that meet the requirements of the United States-Mexico-Canada Agreement.
Carney had previously described Trump’s tariffs as a “direct violation” of the trade agreement and warned that the dispute was increasing costs for consumers, particularly in the United States.
The US Chamber of Commerce also cautioned that higher tariffs could hurt both economies, increase costs for American households, disrupt supply chains and threaten millions of jobs linked to trade under the USMCA.
The latest postponement appears to give both governments additional time to negotiate a broader agreement, with the USMCA itself due for review.
Canada has already faced economic pressure from earlier rounds of US tariffs, while Ottawa previously retaliated against some of Washington’s measures before withdrawing most of them.
For now, the proposed 50 per cent tariffs remain suspended as the two countries work towards finalising an agreement.
