- Trump has paused planned 50% tariffs on Canadian goods for three days
- The move follows progress in US-Canada trade talks
- Canada said key issues still need to be resolved
U.S. President Donald Trump has temporarily halted plans to impose a new 50 per cent tariff on Canadian imports, saying Washington and Ottawa had reached an agreement to resolve their trade dispute.
Eko Hot Blog gathered that Trump announced the three-day suspension late Tuesday, shortly before the proposed tariffs were due to take effect. He said the decision was based on an understanding between the two countries, although the final documents were yet to be completed.
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The announcement came after Trump held talks with Canadian Prime Minister Mark Carney earlier in the day. It was their second conversation this week as officials from both countries continued negotiations over trade issues.
Carney, however, struck a more cautious tone, saying the discussions had produced significant progress but that important issues still needed to be resolved.
“Substantial progress has been made, although there is important work still to be done,” Carney said in a statement.
The U.S. Trade Representative’s office said the proposed agreement would cover broad access for American products in Canada, economic security measures and cooperation on digital trade, among other areas.
Trump also said Canada had agreed to address several concerns raised by the United States, particularly regarding Canadian duties on American dairy products, alcoholic beverages and automobiles.
Neither the Canadian government nor U.S. officials released detailed terms of the proposed agreement, leaving uncertainty over what specific concessions had been reached.
The tariff dispute has been a major source of tension between the two North American neighbours. The proposed 50 per cent duties would have affected about $20 billion worth of Canadian goods and would have applied even to products that previously qualified for preferential treatment under the United States-Mexico-Canada Agreement.
Canadian industries had warned that the additional tariffs could have serious economic consequences, particularly for sectors such as lumber, wine and dairy. Industry representatives also raised concerns that the measures could result in job losses and business closures while complicating broader negotiations over the USMCA.
The two governments have been engaged in intensive negotiations for several weeks. Canada’s Minister responsible for U.S. trade, Dominic LeBlanc, and chief trade negotiator Janice Charette have been in Washington working with senior American officials.
Among the issues under discussion are existing U.S. tariffs on Canadian vehicles and Washington’s concerns about Canada’s dairy protection system and restrictions affecting the sale of American liquor in some provinces.
U.S. officials have also been considering changes to automobile tariffs, including a possible reduction of duties on Canadian vehicles from 25 per cent to 15 per cent. Any further reduction could depend on how much U.S.-made content is included in the vehicles.
A major disagreement has centred on how the amount of American content used to qualify for tariff reductions should be calculated. Washington has pushed for only U.S.-produced materials to count, while Canada has argued that components produced anywhere in North America should be considered.
The Trump administration has made tariffs a major part of its trade strategy despite criticism from businesses and economists and several legal challenges.
Trump also revived discussion about the Keystone XL pipeline in his announcement, saying the long-cancelled project could potentially be brought back. The pipeline was cancelled by former President Joe Biden in 2021 following years of opposition from Indigenous groups and environmental organisations.
Meanwhile, the U.S. distilled spirits industry welcomed the temporary tariff pause and urged both governments to reach a permanent settlement that would restore access for American spirits in Canadian markets.
The latest development gives negotiators three additional days to finalise the proposed agreement and prevent the new tariffs from taking effect
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