Trump Pauses Canada Tariffs as Both Sides Announce Progress on Trade Deal

US President Donald Trump announced late Tuesday he was pausing new 50% tariffs on Canadian goods for three days, just hours before they were set to take effect. Trump said the pause reflects a deal reached between the two countries, subject to finalizing documentation. An hour later, Canadian Prime Minister Mark Carney confirmed substantial progress had been made, while noting important work remains.

Talks Cover Dairy, Alcohol, and Auto Tariffs

Trump and Carney spoke Tuesday afternoon, their second call this week, following weeks of intense negotiations between trade teams. According to Trump, Canada committed to addressing US concerns over duties on dairy products, alcoholic beverages, and motor vehicles. The US Trade Representative’s office said the deal will include broad market access for American goods, economic security commitments, and digital trade alignment.

The new tariffs would have covered roughly $20 billion in imports and applied regardless of existing USMCA protections. Auto tariffs remained a key sticking point, with talks reportedly focused on reducing Section 232 tariffs on Canadian vehicles from 25% to 15%, depending on US content levels.

Trump Floats Reviving Keystone XL Pipeline

Trump also suggested the long-canceled Keystone XL pipeline could be revived, though he offered no further details. The project was scrapped by former President Biden in 2021 following years of environmental and indigenous opposition.

Industry Warns of Risks From Continued Dispute

Trade experts had warned the tariffs could trigger job losses and business closures in Canadian sectors like lumber, wine, and dairy, while complicating broader USMCA negotiations. Canadian officials, including trade minister Dominic LeBlanc, have been negotiating in Washington since last week, with a Canadian source noting all options remain on the table, including domestic industry support, if talks break down.