President Donald Trump has delayed plans to impose 50 per cent tariffs on about $20 billion worth of Canadian imports after Canada and the United States reached a last-minute agreement to continue negotiations.
The tariffs had been scheduled to take effect at 12:01 a.m. Wednesday, but Trump announced less than two hours before the deadline that they would be postponed for three days while officials work to finalize an agreement.
“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.
Prime Minister Mark Carney confirmed the temporary reprieve, saying the two countries had made “substantial progress” in their negotiations but still had important issues to resolve. Carney and Trump spoke twice by phone over the previous two days, including Tuesday afternoon, as negotiators raced to prevent the tariffs from taking effect.
The proposed duties would have covered Canadian products ranging from hockey sticks to medical supplies and affected goods representing roughly five per cent of Canadian exports to the United States. Canada had warned it would respond with tariffs of its own if Washington proceeded with the measures, raising the prospect of a further escalation in the trade dispute between the two countries.
Canada and the United States exchanged approximately $880 billion worth of goods and services last year, while nearly 72 per cent of Canadian goods exports went to the U.S., highlighting the importance of the trading relationship to both economies.
According to a White House proclamation, Canada has indicated a willingness to address measures Washington considers discriminatory against American alcohol, dairy and motor vehicle exports. The Canadian government had not immediately confirmed those specific commitments.
Canadian Chamber of Commerce President and CEO Candace Laing welcomed the three-day delay as temporary relief for businesses but warned that companies still need greater certainty.
“This limbo state is not anyone’s preferred outcome,” Laing said, calling on both governments to quickly finalize an agreement.
The tariff threat is the latest source of tension in Canada-U.S. relations. Trump has repeatedly used tariffs as part of his effort to encourage manufacturing in the United States and has made controversial remarks about Canada becoming the 51st U.S. state.
For the Canadian tariffs, Trump invoked Section 338 of the Tariff Act of 1930, a rarely discussed provision that allows a U.S. president to impose tariffs of up to 50 per cent on imports from countries deemed to discriminate against American businesses. The provision does not require an investigation and has never previously been used to impose tariffs.
The tariff dispute also comes as Canada, the United States and Mexico renegotiate the United States-Mexico-Canada Agreement. The threat of new duties gives Washington additional leverage as it seeks concessions from Ottawa during the broader North American trade negotiations.
For now, the three-day pause prevents an immediate escalation, but both governments face a tight deadline to turn the progress announced Tuesday into a finalized agreement.
