Donald Trump said Tuesday that the United States and Canada have reached an agreement to temporarily halt planned 50 percent tariffs on roughly $20 billion in Canadian goods.
The announcement came after Trump and Canadian Prime Minister Mark Carney held talks earlier in the day, just hours before a 12:01 a.m. Wednesday deadline the President had set for the new trade penalties to take effect.
Posting on Truth Social, 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!’
Trump did not lay out the terms of the reported U.S.-Canada trade agreement, but he appeared to hint that the long-stalled Keystone XL pipeline could be revived. The cross-border project was partly constructed before President Joe Biden revoked its permit on his first day in office in 2021, citing climate concerns.
‘The great Keystone XL Pipeline, long ago killed by Sleepy Joe Biden, may be awoken from the grave!’
Trump also shared an AI-generated image showing himself digging up the pipeline from a grave marked with the words ‘Buried by Biden.’
Carney stopped short of confirming that a final deal had been secured, saying only that the two sides had made ‘substantial progress.’
‘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,’ he told The Daily Mail.
Donald Trump announced that the United States and Canada have made a deal that will pause 50 percent tariffs on $20billion worth of Canadian products
Without offering details, Trump suggested the agreement could bring back the Keystone XL pipeline between the two countries, which got partially built before President Joe Biden , citing climate change, canceled its permit on the day he took office in 2021
‘Substantial progress has been made, although there is important work still to be done. As this work is ongoing, the United States has agreed to postpone the implementation of its 50 percent tariff on a range of Canadian goods under Section 338 of the US Tariff Act of 1930 until end of day, August 21st.’
‘While we continue this work, Canada remains focused on building a stronger, more independent, and more competitive economy at home,’ Carney added.
Trump pulled the surprise on Canadian Prime Minister Mark Carney in mid-July after he met the liberal leader at the World Cup final – where the two appeared chummy.
The White House said in a fact sheet that the tariffs would go into effect in 30 days and cover ‘products ranging from wine to hockey sticks to cement.’
Carney and Trump had spoken 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 deal.
‘We are negotiating,’ Carney told reporters Monday, speaking in French.
‘The negotiations are very intense and delicate. This is not the time to talk about negotiations in public.’
The two countries have wrangled for decades over trade, poking each other over sore spots like Canadian softwood lumber imports and US access to Canada´s protected dairy market.
Pipes for the Keystone XL pipeline stacked in a yard near Oyen, Alberta after Joe Biden, citing climate change , canceled its permit on the day he took office in 2021
Trump’s import taxes would have hit about five percent of what Canada ships to the United States every year, including products ranging from hockey sticks to tongue depressors.
But the political impact would likely have been bigger than the economic one.
Canada had threatened to retaliate against any new tariffs with levies of its own, aggravating a trade fight between countries that sold each other $880 billion worth of goods and services last year.
Nearly 72 percent of Canada’s goods exports last year went to the United States.
And the Trump administration might be wary of imposing a hefty new tariff — paid by US importers who try to pass along the cost to consumers via higher prices — ahead of November’s midterm elections.
US voters are already frustrated with the high cost of living.
The Canadians would like relief from US tariffs on steel and aluminum as well as softwood lumber, which the US says receives unfair government subsidies.
Trump’s approach to dealing with Canada marks an extraordinary departure from the traditionally cooperative relationship between the two countries.
Trump pulled the surprise on Canadian Prime Minister Mark Carney in mid-July after he met the liberal leader at the World Cup final – where the two appeared chummy
The President declared last month that Canada has unfairly discriminated against American autos, alcohol and dairy products
He has hit Canadian goods with tariffs — in a push to bring manufacturing back to the US — and has repeatedly made inflammatory comments about turning Canada into America’s 51st state.
The Canadian public has responded in kind.
A petition to expel the US ambassador, a Trump ally, has collected nearly 218,000 signatures since July 21. It accuses Ambassador Pete Hoekstra of having ‘normalized’ Trump’s talk of annexing Canada, among other complaints.
Trump has made tariffs the centerpiece of his second-term economic agenda. Last year, he imposed double-digit import taxes on almost every country, justifying them by declaring the longstanding US trade deficit a national emergency.
The Supreme Court in February ruled that he’d overstepped his authority, striking down those tariffs and setting the stage for the federal government to pay refunds to importers.
So Trump has looked for other legal authority to impose tariffs.
To hit Canada, he reached back to the Great Depression, invoking Section 338 of the Tariff Act of 1930 to threaten 50 percent tariffs on products that account for about five percent of Canadian exports to the United States.
Nearly a century ago, with the U.S. and world economies in collapse, Congress passed the 1930 tariff law, imposing taxes on imports from around the world.
Known as the Smoot-Hawley tariffs, named for their congressional sponsors, they are notorious among economists and historians for limiting world commerce and making the Great Depression worse.
Section 338 tariffs have never been used before.
They the president to impose tariffs of up to 50 percent on imports from countries that have discriminated against U.S. businesses.
No investigation is required to justify the levies. Nor is there any limit on how long the tariffs can stay in place.
The US is renegotiating a North American trade pact — the US-Mexico-Canada Agreement — that Trump strong-armed America’s neighbors into accepting in his first term.
The threat of Section 338 tariffs gives the United States leverage to seek fresh concessions from Ottawa.
