US Canada trade deal: Trump announces pause on 50% tariffs on Ottawa

US President Donald Trump on Wednesday announced a halt on 50 per cent tariffs on Canada that were scheduled to come into force on Thursday, saying that the two countries 'have a deal'.

"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," he said in a post on Truth Social.

"The great Keystone XL Pipeline, long ago killed by Sleepy Joe Biden, may be awoken from the grave," he added.


The United States Trade Representative (USTR) stated that the deal would include comprehensive market access for all American goods, economic security commitments, digital trade alignment, and many important provisions.

"The deal will include comprehensive market access for all American goods, economic security commitments, digital trade alignment, and many important provisions that will continue to protect our market and American workers, along with our Canadian partners," it said.

Also read: US, Canada hold last-minute talks to stop 50% U.S. tariffs on $20 billion worth of Canadian goods

'Important work still to be done': Carney

Speaking on the deal with the US, Canadian Prime Minister Mark Carney said that the two nations have made 'substantial progress', although "there is important work still to be done."

"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. Substantial progress has been made, although there is important work still to be done," Canada PM's office said in a statement.

As this work is ongoing, the US has agreed to postpone the implementation of its 50% tariff on a range of Canadian goods under Section 338 of the US Tariff Act of 1930 until end of day, August 21, it added.

The statement further stated that Canada remains focused on building a stronger, more independent, and more competitive economy at home.

US, Canada held last-minute talks

Washington and Ottawa held negotiation talks in an effort to reach a truce on tariffs before a 12.01 am Wednesday deadline set by Trump.

Trump threatened to impose 50 per cent tariffs on $20 billion worth of Canadian products, ranging from hockey sticks to tongue depressors, if no deal was reached.

Carney and Trump spoke twice by phone in the past two days about the ongoing negotiations, including another call Tuesday afternoon, Carney's office said, underscoring the last-minute push for a trade deal.

"We are negotiating,” Canadian Prime Minister Mark Carney told reporters Monday, as quoted by The Associated Press. “The negotiations are very intense and delicate. This is not the time to talk about negotiations in public.”

The two countries have argued for decades over trade, poking each other over sore spots like Canadian softwood lumber imports and US access to Canada's protected dairy market, but the ties continued to remain strong.

The 5,525-mile US-Canada border remains undefended, and nearly 330,000 people and $2 billion worth of goods cross it every day. 800,000 Canadians live in the United States.

Trump threatened tariffs on Canadian goods in a push to bring manufacturing back to the US and has repeatedly made inflammatory comments about turning Canada into America's 51st state.

Also read: 'Important work still to be done': Carney after Trump halts 50% tariffs

Trump's tariff agenda

The US President has made tariffs the centerpiece of his second-term economic agenda.

The latest US-Canada trade deal comes after he imposed double-digit import taxes on almost every country last year, justifying them by declaring the longstanding US trade deficit a national emergency. The US Supreme Court in February ruled that he had overstepped his authority, striking down those trade tariffs and setting the stage for the federal government to pay refunds to importers.

Trump then looked for other ways to rebuild his tariff wall against countries to push local manufacturing. Last month, he imposed import taxes of 10 per cent to 12.5 per cent on 59 countries and the European Union, together accounting for 99 per cent of US imports, citing allegations on failing to have or to enforce restrictions on imports made from forced labor.