3 min readUpdated: Aug 19, 2026 11:41 AM IST
US President Donald Trump on Tuesday paused for three days the planned additional 50 per cent tariffs on certain Canadian goods, saying Washington and Ottawa had reached a preliminary deal just hours before the measures were due to take effect.
Canadian Prime Minister Mark Carney said the two countries had made “substantial progress” but indicated that negotiations were not yet complete.
In a post on Truth Social, Trump said he had paused the tariffs “for three days”, citing a deal with Canada that was subject to the finalisation of documents.
Trump also hinted at a possible revival of the Keystone XL oil pipeline, which former President Joe Biden cancelled in 2021. However, there was no immediate indication that the project formed part of the emerging agreement with Canada.
“The great Keystone XL Pipeline, long ago killed by Sleepy Joe Biden, may be awoken from the grave,” he added.
Trump’s announcement came just hours before the tariffs were due to take effect at 12:01 am Eastern time on Wednesday.
The additional tariffs were set to hit about $20 billion worth of Canadian goods, including products such as hockey equipment, alcohol and other manufactured goods, and risked further escalation in the already strained US-Canada trade relationship.
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Carney and Trump held telephonic conversations
Trump and Carney spoke twice in the days before the deadline as negotiators tried to prevent the new tariffs from taking effect.
The economic stakes are high: about 70 per cent of Canada’s exports went to the United States in June, according to Scotiabank data. The share averaged 72 per cent in 2025.
The threat of higher tariffs also came with political risks for Trump’s administration ahead of the November midterm elections, particularly if they contributed to higher prices or economic uncertainty.
“I don’t think either side really wants these tariffs to come into effect,’’ Ryan Majerus, a partner at King & Spalding and a former U.S. trade official, said before the delay was announced, according to AP. “There’s a pretty strong push on both sides to find an off-ramp here.’’
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The tariff dispute has further strained US-Canada relations, which have also been unsettled by Trump’s repeated comments about Canada becoming the 51st US state.
Why it matters
The proposed duties were part of Trump’s broader effort to use tariffs to reshape US trade ties. They came on top of existing US tariffs affecting several Canadian sectors and added another layer of uncertainty to the world’s largest bilateral trading relationship.
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