Less than two hours before 50 per cent tariffs on nearly $20 billion of Canadian imports take effect, US President Donald Trump said he would delay imposing new tariffs on a wide range of Canadian goods for three days while the countries finalized a trade deal.
“I have suspended for three days the 50% tariffs on Canada that were scheduled to take effect tomorrow morning, based on the fact that Canada and the United States, subject to finalization of documents, have reached an AGREEMENT!” Trump wrote on Truth Social.
The two sides are deadlocked on a number of issues, including U.S. tariffs on automobiles and a ban on the sale of American liquor in many Canadian provinces.
Trump and Canadian Prime Minister Mark Carney spoke twice by phone this week, and intensive talks have been ongoing since July after the US president threatened to impose new tariffs from August 19.
“Significant progress has been made, although important work remains to be done,” Carney wrote on social media X.
In his post, Trump also noted that a final trade agreement could allow the Keystone XL pipeline project to resume. Construction of this oil pipeline, which would have connected Alberta to the United States, was blocked by both the Obama and Biden administrations.
Environmentalists and indigenous peoples have long opposed the pipeline, but Trump has repeatedly said he would like to restart the project, which was planned to transport 830,000 barrels of oil per day.
“The great Keystone XL oil pipeline, long buried by Sleepy Joe Biden, may be raised from the grave!” Trump wrote on Truth Social.
“The agreement will include comprehensive market access for all U.S. goods, economic security commitments, and harmonized digital trade rules,” the X Office of US Trade Representative Jamison Greer said.
It will also contain "many important provisions that will continue to protect our marketplace and American workers, as well as our Canadian partners," the office added.
The extra three days is good news for Canadian negotiators and for businesses on both sides of the border, which have repeatedly warned that the new tariffs would hurt both countries.
Tensions between the two largest trading partners have intensified with Trump's return to the White House and the start of his new trade war with virtually the entire world, which could not help but affect trade relations between Canada and the United States.
The new round of tariffs, which Trump delayed, would have included wine, dairy products, cement, clothing and hockey equipment.
The US has already imposed tariffs on Canadian steel and aluminum, cars and lumber.
Canada sought to reach an agreement that would force the US to eliminate or reduce tariffs in these key sectors.
The United States, in turn, demanded a number of concessions from Canada, including the elimination of remaining retaliatory tariffs on American cars and adjustments to dairy quotas to allow greater access for American cheese producers.
In addition, the United States is counting on lifting the ban on the sale of American alcohol, introduced last year by most Canadian provinces in response to Trump's tariffs.
In the final hours before Wednesday's deadline, negotiators discussed an agreement that would cut U.S. tariffs on Canadian-made cars from 25% to 15%, according to Reuters, citing anonymous sources.
However, the two countries could not agree on which cars would be eligible for the tariff reduction, with the US insisting that it only apply to cars with a high proportion of US-made components.
