US President Donald Trump has announced a three-day delay to the planned 50% tariffs on a wide range of Canadian goods, saying Washington and Ottawa are close to finalising a new trade agreement.
The announcement came less than two hours before the tariffs, which were expected to affect nearly $20bn (£14.8bn; C$28bn) worth of Canadian imports, were due to take effect.
Trump said the decision was based on progress in negotiations between the two countries.
“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 said in a social media post.
The United States and Canada have been negotiating intensely since July after Trump threatened to introduce the new tariffs by 19 August. The two countries remain divided over several issues, including US duties on Canadian automobiles and restrictions on American alcohol sales in some Canadian provinces.
Canadian Prime Minister Mark Carney confirmed that progress had been made but said negotiations were not yet complete.
“Substantial progress has been made, although there is important work still to be done,” Carney said in a letter posted on X.
Trump also suggested that a final agreement could pave the way for the revival of the Keystone XL pipeline, a long-delayed project that would transport oil from Alberta to the United States.
“The great Keystone XL Pipeline, long ago killed by Sleepy Joe Biden, may be awoken from the grave!” Trump wrote on Truth Social.
The proposed pipeline, which has faced opposition from environmental and Indigenous groups, was previously blocked under the Obama and Biden administrations. Trump has repeatedly expressed support for reviving the project, which was designed to transport about 830,000 barrels of oil per day.
The US Trade Representative’s office said the proposed agreement would include “comprehensive market access for all American goods, economic security commitments, digital trade alignment”.
It would also contain “many important provisions that will continue to protect our market and American workers, along with our Canadian partners”, the office added.
The three-day extension has been welcomed by businesses and Canadian negotiators, who have warned that higher tariffs could increase costs and disrupt trade on both sides of the border.
The threatened tariffs would have covered Canadian products including wine, dairy, cement, clothing and hockey equipment. They would have been added to existing US tariffs on Canadian steel, aluminium, automobiles and lumber.
Canada has been pushing for the removal or reduction of tariffs on key sectors, while Washington has demanded several concessions from Ottawa.
Among the US demands are the removal of Canada’s remaining retaliatory tariffs on American vehicles, greater access for US cheese producers through changes to dairy quotas, and an end to provincial restrictions on American alcohol sales.
In the final hours before the original deadline, negotiators were reportedly considering reducing US tariffs on Canadian automobiles from 25% to 15%. However, disagreements remained over which vehicles would qualify, with Washington pushing for the lower rate to apply only to cars containing a high percentage of American-made components.
Carney also faces the challenge of securing support from Canada’s provincial premiers to restore sales of US alcohol, since liquor distribution is controlled at the provincial level.
Ontario Premier Doug Ford, whose province has been heavily affected by US auto tariffs, said he would consider lifting the alcohol restrictions if Canada secured a “fair deal”.
The US Chamber of Commerce also urged both governments to reach an agreement, warning that “higher tariffs would damage both economies, drive up costs for US families, further disrupt critical supply chains, and risk the 13 million American jobs that depend on trade under the US-Mexico-Canada Trade Agreement”.
The three-day pause now gives negotiators additional time to resolve the remaining disagreements and finalise the documents needed for a broader US-Canada trade deal.
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