Shortly before new tariffs on a number of Canadian products came into force, US President Donald Trump put his plans on hold. The collection of import fees should be suspended for three days so that both sides can conclude a deal for the Keystone XL oil pipeline project, he said on his Truth Social platform.
Trump originally wanted to impose a 50 percent tariff on a long list of Canadian products starting today. According to reports, negotiators from both countries negotiated until the last moment. Canadian Prime Minister Mark Carney announced on Monday that he would be prepared for any scenario and would negotiate from a "position of strength."
After Trump's postponement was announced, Carney said: "Significant progress has already been made, although there is still significant work to be done." He pointed out that his country continues to focus on "building a stronger, more independent and more competitive economy at home."
Up to 50 percent taxes on Canadian products
In the trade dispute between neighboring countries, Trump originally wanted to impose a 50 percent tariff on, among other things, Canadian wine, hockey sticks, furniture and dairy products.
According to a statement from the White House in July, the U.S. is responding "to Canada's discriminatory treatment of American products." Cars, alcohol and dairy products were mentioned. US Trade Representative Jamieson Greer announced at the time that the new tariffs would apply to imports from Canada worth around $20 billion. In total, the USA imported goods worth 383 billion US dollars (330 billion euros) from the neighboring country in 2025.
Trump wants to revive pipeline project
Keystone XL is an oil pipeline project blocked by Trump's Democratic predecessor Joe Biden. The Republican Trump has long had the desire to revive the project despite concerns from environmentalists.
The project involved the 1,900 kilometer extension of the Keystone Pipeline, which went into operation in 2010 and runs from the Canadian province of Alberta to the USA. Oil extracted from tar sands was to be pumped through the pipe to the coast of the Gulf of Mexico.
But environmentalists were successful in their years-long protest against the oil industry: Although part of the pipeline already exists in the south, the operators and the government of Alberta canceled the project in June 2021. This ended a long conflict that also intensively occupied courts and politicians in the USA and Canada.
The decision by the company and the Canadian province came as little surprise at the time: Biden had revoked the construction permit granted by his then predecessor Trump after taking office. In doing so, he followed the line of former President Barack Obama, who had already banned the project - even before Trump became president for the first time in 2017 - due to environmental concerns.
Trump is increasingly angering Canada
Relations between Canada and the USA have deteriorated significantly since Trump took office. The triggers include additional tariffs that have already been imposed, repeated threats by the US President against Canada and his idea, which has been expressed several times, to make the neighboring country the 51st state of the USA. In response to the US tariffs, many Canadian provinces removed alcohol from the United States from shelves and encouraged consumers to buy domestic products.
"Previous rounds of tariffs focused heavily on steel, aluminum, automobiles and wood. This round expands the dispute to include smaller manufacturers, consumer goods brands, retailers and building materials suppliers," writes Andreas Schotter, professor of international economics at the Ivey Canadian School of Business. He assumes that the regulation - if it remains in place - will reduce exports of goods to the USA in the long term.
