Trump Pauses New 50% Canada Tariffs for Three Days as Trade Deal Nears

US President Donald Trump has paused the introduction of new 50% tariffs on Canadian goods for three days, saying Washington and Ottawa have reached a deal that could avert the latest escalation in their trade dispute.

The tariffs had been scheduled to take effect after midnight on Wednesday, but Trump announced the delay after discussions with Canadian Prime Minister Mark Carney. The move gives negotiators additional time to finalise the terms of a broader agreement.

Trump said the two countries had reached what he described as a deal, although key details have yet to be publicly finalised. Canadian officials have been more cautious, saying substantial progress has been made but important work remains before an agreement can be completed.

The proposed 50% duties would have applied to about $20 billion worth of Canadian imports, adding another layer of tariffs to an already strained US-Canada trading relationship.

The latest measures targeted products affected by a dispute over Canadian trade policies, including areas such as dairy, alcohol and automobiles. Canadian exporters and businesses had warned that the tariffs could increase costs and disrupt supply chains.

The three-day pause now provides both sides with additional time to negotiate outstanding issues.

US Trade Representative Jamieson Greer said negotiations had produced an agreement designed to strengthen the North American economy, protect American workers and improve market access.

However, some of the most sensitive issues remain unresolved, including the treatment of the automotive sector and Canada’s protection of its dairy market.

Carney welcomed the progress but stressed that the negotiations were not yet complete.

Canadian negotiators were returning to Ottawa to brief the prime minister and continue work on finalising the agreement.

The dispute is particularly significant because Canada is deeply integrated with the US economy, with the vast majority of Canadian exports heading to the United States.

The temporary tariff reprieve has already provided some relief to financial markets, with the Canadian dollar strengthening and Canadian stocks recovering from recent losses.

Trump has also suggested that the proposed agreement could potentially revive the Keystone XL oil pipeline, a controversial project that was cancelled by former President Joe Biden.

Trump indicated that the pipeline could be reconsidered as part of the broader US-Canada economic relationship, although no final commitment has been announced.

For now, the three-day pause gives negotiators a narrow window to turn the reported understanding into a formal agreement and prevent another escalation in the trade dispute.