Trump pauses new tariffs on Canada and says countries close to a deal

US President Donald Trump has decided to delay imposing new tariffs on Canadian goods for three days, as the two countries reportedly reach a trade deal. The 50% tariffs, originally scheduled to take effect tomorrow, have been paused pending the finalization of documents. This decision came less than two hours before the tariffs were set to be implemented, which would have affected nearly $20bn (C$28bn) of Canadian imports.

The two nations have been at odds over several issues, including US tariffs on autos and Canadian provinces banning American liquor sales. Trump and Prime Minister Mark Carney have spoken twice this week, and trade negotiators have been engaged in intense talks since July. The looming tariffs were in addition to existing US tariffs on Canadian steel, aluminum, autos, and lumber.

A final trade deal could potentially revive the Keystone XL pipeline, a project blocked by both the Obama and Biden administrations. The pipeline, which would connect Alberta to the US, would carry 830,000 barrels of oil a day. Trump has expressed interest in reviving the pipeline, which has long been opposed by environmentalists and indigenous groups.

The extension of the deal is seen as positive news for Canadian negotiators and businesses on both sides of the border, who had warned that the new tariffs would harm their economies. Tensions between the US and Canada have been high since Trump took office in January of the previous year, as he initiated a wide-ranging global tariff program. The latest tariffs threatened by Trump would have been applied to a range of Canadian imports, including wine, dairy, cement, clothing, and hockey equipment.