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After working around the clock for the better part of a week toward an interim bilateral trade deal, trade officials from the United States and Canada may have reached a consensus that will stave off a fresh round of punishing tariffs.<\/p>\n
About an hour before the 12:01 a.m. deadline Wednesday morning that could have marked the start of new 50 percent duties on $20 billion in Canadian products, President Donald Trump Truthed that he had “paused” the trade action 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!”<\/p>\n
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“The great Keystone XL Pipeline, long ago killed by Sleepy Joe Biden, may be awoken from the grave!” he added, referring to a 1,200-mile planned expansion of an oil pipeline system designed to transport 830,000 barrels of crude oil from Hardisty, Alberta, to Steele City, Neb. daily. The resurrection of the project may be integral to the prospective truce.<\/p>\n
The news, which came literally in the 11th hour, came as a surprise to those close to the dealmaking.<\/p>\n
Throughout the day on Tuesday, administration officials signaled that the chances of reaching an agreement were slim, according to Bloomberg. Sources close to the matter said it was unlikely that the tariffs<\/a>, levied under Section 338 of the Tariff Act of 1830, could be avoided\u2014though they said Trump and Canadian Prime Minister Mark Carney held phone calls about the matter on both Monday and Tuesday.<\/p>\n “Over the last number of weeks, Canada has engaged in intensive discussions with the United States to address outstanding trade issues and deliver greater certainty and real benefits for Canadian businesses, workers, farmers and families,” Carney wrote in an official statement posted to X Tuesday evening. “Substantial progress has been made, although there is important work still to be done.”<\/p>\n Carney went on to clarify that the imposition of tariffs had been paused until Aug. 21.<\/p>\n The crux of the issue, the U.S. administration has said in recent months, are the relative trade disadvantages for U.S. exporters created by Canadian policies. According to the White House, Canada has imposed tariffs and quotas specifically on American-made cars while granting autos from other markets better import terms. As such, U.S. motor vehicle exports to Canada have declined by 22 percent from 2025.<\/p>\n While new U.S. tariffs on Canada would impact a relatively small amount\u2014just 5 percent\u2014of America-bound exports, they would cover products like plastics, furniture, wood, paper, alcohol, textiles and apparel<\/a>.<\/p>\n That would be a blow to American mills and apparel producers, according to the Washington, D.C.-based National Council of Textile Organizations, because the countries share a deeply integrated co-production chain for such products. In fact, more than half of the textiles exported by U.S. makers<\/a> go to Canada<\/a> and Mexico, and those products have been blanketed in duty-free benefits by the U.S.-Mexico-Canada Agreement (USMCA), facilitating cooperation between the North American nations.<\/p>\n