Trump pauses tariffs on Canada after last-minute deal

In a move to avert a looming trade dispute, US President Donald Trump announced on Tuesday that he would pause for three days the planned 50% tariffs on certain Canadian goods. The decision came shortly before the tariffs were set to take effect, which would have impacted approximately $20 billion worth of Canadian products, including items such as hockey equipment, alcohol, and other manufactured goods.

Canadian Prime Minister Mark Carney stated that while "substantial progress" had been made in negotiations, they were not yet complete.

Trump, via a post on Truth Social, revealed that the tariffs would be paused pending the finalization of documents, but did not explicitly confirm the involvement of the Keystone XL oil pipeline in the emerging agreement. The Keystone XL pipeline, which was cancelled by former President Joe Biden in 2021, has been a subject of discussion in recent trade negotiations.

The threat of these tariffs had significant economic implications, as Canada is heavily reliant on its exports to the United States. According to Scotiabank data, about 70% of Canada's exports went to the US in June 2025, with an average of 72% over the past year. Both countries held phone calls in the days leading up to the deadline, in an attempt to prevent the new tariffs from becoming a reality.

The political consequences of the tariff dispute were also a concern, particularly for Trump's administration as the November midterm elections approached. Higher prices and economic uncertainty resulting from the trade dispute could have negatively impacted the administration's standing. Experts suggested that there was a strong push from both sides to find an off-ramp in the ongoing negotiations.