President Donald Trump said Tuesday that the United States and Canada reached a tentative deal to pause new 50% tariffs on about $20 billion in Canadian imports, giving negotiators three additional days to finalize an agreement.
The tariffs were scheduled to take effect at 12:01 a.m. Wednesday. Trump announced the delay less than two hours before the deadline, saying the two countries had reached a deal “subject to the finalization of documents.”
The move temporarily eases another potential escalation between the two longtime trading partners, but significant details of the agreement remain unresolved.
Tariffs Delayed for Three Days
Trump announced the pause in a post on Truth Social Tuesday night.
“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.
A White House proclamation signed August 18 formally moved the effective date of the additional duties from August 19 to August 22 at 12:01 a.m. Eastern time.
The proposed tariffs would apply to about $20 billion worth of Canadian goods, or roughly 5% of the products Canada ships to the United States each year. The affected products include items ranging from hockey sticks and wine to tongue depressors and other consumer and industrial goods.
The tariffs stem from what the Trump administration described as discriminatory Canadian trade measures affecting U.S. alcohol, dairy and motor vehicle exports.
Canada Says More Work Remains
Canadian Prime Minister Mark Carney confirmed that the two countries agreed to the three-day delay but offered a more cautious assessment of the negotiations.
“Substantial progress has been made, although there is important work still to be done,” Carney said in a statement Tuesday night.
Carney and Trump spoke twice by phone over the previous two days, including a call Tuesday afternoon, as negotiators worked to bridge remaining differences.
A White House proclamation said Canada had expressed a commitment to remove measures the Trump administration considers discriminatory toward U.S. alcohol, dairy and motor vehicle exports.
Canada had not immediately confirmed all of those commitments.
What Could Be in the Deal?
Trump has offered few specifics about the agreement, but his comments suggested that several issues could be addressed.
Trump indicated that changes involving Canadian tariffs on U.S. automobiles could be part of the deal. He also suggested Canadian tariffs affecting U.S. farmers could be reduced or eliminated.
“We’ve got to give something,” Trump said Wednesday, CNBC reported. “They were paying a high number, we’re reducing it a little bit, it’s good for everybody.”
Trump also raised the possibility of reviving the Keystone XL pipeline, which was intended to carry oil from Alberta to Nebraska before the project was canceled in 2021.
“The great Keystone XL Pipeline, long ago killed by Sleepy Joe Biden, may be awoken from the grave!” Trump wrote.
The president did not specifically mention Keystone XL when speaking with reporters Wednesday.
U.S. Trade Representative Jamieson Greer said the negotiations had eliminated some of the disputes that had complicated the relationship between the two countries.
Trump has described the emerging agreement as a “very fair deal for both” countries, while emphasizing that it remains subject to the completion of formal documents.
Why the Tariffs Matter
The United States and Canada have one of the world’s largest trading relationships. The two countries exchanged about $880 billion in goods and services over the past year, making a major tariff increase potentially significant for businesses and consumers in both countries.
Canada is particularly dependent on the U.S. market, with nearly 72% of its goods exports going to the United States last year.
For U.S. businesses, tariffs are paid by importers and can ultimately be reflected in higher prices for consumers when companies pass along increased costs.
Canada had also threatened retaliatory tariffs if the new U.S. duties took effect, raising the possibility of another round of escalating trade measures.
The three-day pause, therefore, gives businesses and negotiators more time to avoid an immediate escalation of the trade fight.
Businesses Still Want Certainty
The Canadian Chamber of Commerce said the delay provides some relief for businesses but does not offer the certainty that would come with a signed interim agreement.
The three-day window is now being used to finalize the terms of the tentative deal and determine how the two countries will address the underlying trade disputes.
For now, the proposed 50% tariffs remain suspended until 12:01 a.m. Eastern time Saturday, August 22, under Trump’s proclamation.
Provided by Dallas Express
