Trump Hits Pause On New Canada Tariffs

President Donald Trump paused a 50 percent tariff on Canadian goods hours before it was scheduled to kick in, saying the two countries had reached a preliminary deal.

In a post on social media late Tuesday, Trump announced that he would delay the duties, set to go into effect at midnight on Wednesday, for three days “based on the fact that Canada and the U.S.A., subject to the finalization of documents, have a DEAL!”

The president teased that the agreement could include resurrecting the Keystone XL Pipeline, a long-stalled pipeline extension intended to pump crude oil from Alberta, Canada, to the Midwest of the United States.

The White House did not provide further details on the agreement but the Office of the U.S. Trade Representative said on social media that 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.”

Canadian Prime Minister Mark Carney issued a statement confirming the pause. "Substantial progress has been made, although there is important work still to be done," Carney said. "As this work is ongoing, the United States has agreed to postpone the implementation of its 50% tariffs on a range of Canadian goods under Section 338 of the U.S. Tariff Act of 1930 until end of day, August 21st."

If finalized, a deal would not only avert a potentially costly trade war, but it is expected to enable a broader discussion on the future of the U.S.-Mexico-Canada Agreement, the North American trade pact Trump signed in his first term.

Officials from the two countries have been engaged in wall-to-wall trade discussions over the past few days focused on striking a compromise on U.S. tariffs on automobiles and Canada’s policies that protect its dairy industry, among a handful of other trade irritants.

Trump and Carney spoke late on Monday by phone and again on Tuesday as they worked to seal a last-minute agreement.

The 50 percent tariffs would have hit only about $20 billion of the more than $383 billion the U.S. imports from Canada, but they targeted a number of signature products like hockey equipment, alcohol and forestry products. And they risked heightening affordability concerns in key states in the U.S. less than three months before the midterm elections.

Industry groups immediately welcomed the pause, while urging Trump and Carney to cement a deal. Canadian Chamber of Commerce Candace Laing, said in a statement that it was paramount that the two countries secure a long-term agreement to iron out their differences.

“Businesses may not be closing up shop with this news, but an extension doesn’t bring the certainty that a signed interim deal would,” Laing said. “We know that stability is in short supply and businesses will take any ounce they can get. This limbo state is not anyone’s preferred outcome — time is of the essence.”

Mickey Djuric and Michael Blanchfield contributed to this report from Ottawa.