President Trump paused a threatened 50% tariff on Canadian goods late Tuesday, less than two hours before it was due to take effect, saying the two countries had reached the outline of a trade deal after days of intense negotiation.
"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 social media. The pause pushes the deadline to the end of Friday while negotiators finalize legal text.
The reprieve followed a call between Trump and Canadian Prime Minister Mark Carney on Tuesday, described by Carney a day earlier as "very delicate and intense." Carney confirmed the delay but was notably more cautious than Trump about how close a deal actually was. "Substantial progress has been made, although there is important work still to be done," he said.
What's in the Deal
The Office of the U.S. Trade Representative said the emerging agreement would include "comprehensive market access for all American goods, economic security commitments, digital trade alignment" and additional provisions framed as protections for U.S. workers, according to details reported Wednesday. Trump also revived talk of the long-dormant Keystone XL pipeline, writing that the project "may be awoke from the grave" — a reversal of the permit cancellation issued by the Biden administration in 2021, after Trump had first approved the pipeline during his first term.
The threatened 50% tariff rate would have marked one of the steepest levies imposed on a major U.S. trading partner this year, hitting a broad swath of Canadian exports at a moment when the two economies remain deeply intertwined through supply chains in autos, energy and agriculture. Neither government has published a full list of covered goods or confirmed whether the delay could be extended again if the paperwork is not finished by Friday.
Markets and business groups on both sides of the border have watched the on-again, off-again tariff threats warily for weeks, with Canadian officials repeatedly warning that steep, sudden duties would disrupt cross-border manufacturing. For now, the three-day window buys both governments room to negotiate without the tariffs taking effect — but leaves open the possibility that talks could still collapse before Friday's new deadline.
