President Donald Trump stepped back from imposing sweeping 50% tariffs on Canadian goods, announcing a three-day pause hours before the duties were set to take effect.
Trump posted on Truth Social late Tuesday that he had halted the tariffs based on progress toward a formal agreement with Canada, writing that the two countries “have a DEAL!”
Trump wrote: “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!”
The tariffs had been set to take effect at 12:01 a.m. ET, and would have covered roughly $20 billion worth of Canadian imports across multiple sectors.
Targeted products included dairy, alcohol, furniture, industrial equipment, plastics, clothing, and other manufactured goods spanning well beyond Trump’s core trade grievances.
Trump invoked Section 338 of the Tariff Act of 1930, marking the first recorded use of that law in nearly a century to impose punitive duties on a trading partner.
Unlike recent tariff actions, Section 338 carries no apparent time limit, meaning the duties could have remained in place indefinitely had they taken effect.
Another significant distinction was that the tariffs would have included no exemptions for goods compliant with the US-Mexico-Canada Agreement, a departure from other recent trade measures.
Canadian Prime Minister Mark Carney and Trump spoke on both Monday and Tuesday as negotiations continued, with Carney describing the talks as “very delicate and intense.”
Canadian officials sought not only the complete removal of the Section 338 tariffs but also reductions to Section 232 tariffs on steel and aluminum and lower duties on automobiles.
A reported sticking point in negotiations was U.S. resistance to cutting current 25% automobile tariffs below 15%, though Trump’s social media post did not address whether duties would ultimately be reduced.
Trump also referenced the Keystone XL pipeline in his post, writing that it “may be awoken from the grave!” without elaborating on any specific plans or agreements regarding the project.
Dan Kelly, president of the Canadian Federation of Independent Business, warned that a 50% tariff “essentially makes a product uneconomic to sell into a particular market.”
Kelly added that many of the group’s 103,000 members said the new tariffs could “grind their U.S. sales to a halt” if implemented, underscoring the economic stakes of the standoff.
The three-day window gives both governments a narrow timeframe to finalize documents and potentially reach a broader trade framework before tensions escalate again.
