Trump pauses 50pc tariffs on Canadian goods for three days as both sides signal broader trade agreement

On Tuesday, US President Donald Trump halted the planned implementation of 50% tariffs on Canadian goods just hours before a midnight deadline, as both nations signaled they were nearing a comprehensive trade agreement. The decision was made public on Trump's Truth Social platform. Canada's Prime Minister was less definitive, stating that "substantial progress has been made" towards a deal, but more work was required.

The United States and Canada have been engaged in intense negotiations to revise their existing trade deal, the USMCA, which Trump signed during his first term but now believes should be amended. The US Trade Representative's office detailed that the expected pact will include comprehensive market access for American products, economic security commitments, and digital trade alignment.

Trump claimed that Canada had promised to remove discriminatory or unequal treatment, which had prompted the initial tariffs. The tariffs, set to affect around 5.5% of Canada's exports to the US worth about $20 billion, primarily targeted alcoholic beverages, automobiles, and dairy products. While the economic impact of the duties was deemed "modest," the White House warned that central Canada's manufacturing sector would be adversely affected.

Canada attempted to secure relief from these sector-specific tariffs by promising actions like pressuring provinces to stock US alcohol and wine. The tariffs, signed by Trump, aimed to hold Canada accountable for its retaliatory measures, but the US Supreme Court had previously annulled many of his global tariffs.