The new tariffs would have affected about US$20 billion worth of Canadian imports. Businesses warned of job losses and disruption to vulnerable sectors including lumber, wine and dairy.
WASHINGTON: United States President Donald Trump announced late on Tuesday (Aug 18) he was putting a three-day pause on new 50 per cent tariffs set to go into effect on Canadian goods at midnight, saying the two countries had reached a deal.
An hour later, Canadian Prime Minister Mark Carney said in a statement that “substantial progress has been made, although there is important work still to be done”.
Trump said in his post on Truth Social that he paused the tariffs “based on the fact that Canada and the USA, subject to the finalisation of documents, have a DEAL”.
Trump and Carney spoke on Tuesday afternoon, their second conversation this week, and their negotiators have been involved in weeks of intense, opaque talks.
“While we continue this work, Canada remains focused on building a stronger, more independent and more competitive economy at home,” Carney said in his statement.
US Trade Representative Jamieson Greer’s office said the deal will include “comprehensive market access for all American goods, economic security commitments, digital trade alignment”, and other provisions.
In a proclamation posted on the White House website, Trump said he had received Canada’s commitment to address US concerns related to duties on dairy products, alcoholic beverages and motor vehicles.
US officials provided no further details and the Canadian government did not confirm any contents of an agreement.
Existing US auto tariffs had been a sticking point, two industry sources familiar with the talks said earlier.
The new US tariffs would have covered about US$20 billion worth of imports and applied regardless of whether Canadian goods qualify for preferential treatment under the US-Mexico-Canada trade agreement (USMCA), which has shielded much of Canadian industry from earlier US tariffs.
Trump added in his social media post that the Keystone XL pipeline – a project cancelled by former President Joe Biden in 2021 after years of indigenous and environmental opposition – “may be awoken from the grave”, but did not provide details.
TARIFFS COULD HAVE LED TO JOB LOSSES, BUSINESS CLOSURES
Trade experts and industry officials said earlier that the new tariffs could lead to job losses and business closures in vulnerable sectors in Canada, including lumber, wine and dairy. They also warned the dispute could complicate broader USMCA negotiations.
Canada’s minister responsible for US trade, Dominic LeBlanc, and chief trade negotiator Janice Charette have been in Washington since last week for talks.
On Monday, the Canadian officials met for nearly two hours with Greer and Commerce Secretary Howard Lutnick.
Greer has repeatedly cited Canada’s tariffs that followed initial US tariffs, the Canadian dairy supply management system and some provinces’ refusal to stock US liquor, among other US grievances.
