US President Donald Trump has temporarily delayed plans to impose an additional 50% tariff on goods imported from Canada, signaling a possible breakthrough in the ongoing trade tensions between Washington and Ottawa.
Trump announced on Tuesday night that the tariffs, which were scheduled to take effect on Wednesday, would be suspended for three days. He said the United States and Canada had reached a trade understanding, but the decision would depend on finalizing the necessary paperwork.
The Canadian government, however, has not yet officially confirmed that an agreement has been reached.
Trump’s announcement has also revived discussion over the Keystone XL pipeline, a major energy infrastructure project that was canceled by the Biden administration in 2021. Trump suggested that the latest developments could create an opportunity to revive the project, although he provided no detailed plan or timeline.
Earlier on Tuesday, Trump spoke by telephone with Canadian Prime Minister Mark Carney. It was the second conversation between the two leaders this week, amid weeks of escalating tensions over trade, tariffs and automobile imports between the neighboring countries.
Two industry sources familiar with the discussions said tariffs on Canadian automobiles entering the US market had emerged as one of the most difficult issues in the negotiations. The proposed 50% tariff could have affected nearly $20 billion worth of Canadian goods, the sources said.
The proposed measures were also expected to affect Canadian products that currently receive preferential access to the US market under the United States-Mexico-Canada Agreement (USMCA), raising concerns among businesses on both sides of the border.
The three-day suspension is therefore being viewed as a potentially crucial window for Washington and Ottawa to finalize a broader trade understanding before the higher tariffs take effect.
Whether a final agreement will be reached remains uncertain and will depend on the progress of negotiations over the coming days.
Source: Reuters