Trump suspends 50 per cent tariffs on Canadian imports as trade deal nears

US President Donald Trump has announced a three-day suspension of scheduled 50 per cent tariffs on nearly $20 billion of Canadian imports, stating that a trade agreement is close. The pause, declared via social media less than two hours before the levies were set to take effect, provides a window for negotiators to finalise documents addressing longstanding commercial disputes.

The announcement follows intense talks between trade representatives since July and two recent calls between Trump and Canadian Prime Minister Mark Carney. Carney confirmed in a letter posted on X that substantial progress had been made, though he noted important work remained. The delay averts immediate penalties on a range of goods including wine, dairy, cement, clothing and hockey equipment, which were to be added to existing tariffs on steel, aluminium, autos and lumber.

Key points of contention under negotiation include US tariffs on Canadian automobiles and Canadian restrictions on American liquor sales. Negotiators were reportedly discussing a reduction of US tariffs on Canadian autos from 25 per cent to 15 per cent. However, disagreements persist regarding eligibility, with the US pushing for tariff reductions to apply only to vehicles with high American-made content.

Ontario Premier Doug Ford indicated that his province would only consider lifting the ban on US alcohol sales if a fair deal is reached. Ford noted that liquor sales are controlled by provincial governments, complicating federal efforts to secure a comprehensive agreement. The US has previously demanded the removal of these retaliatory bans, imposed by most Canadian provinces last year.

US Trade Representative Jamieson Greer’s office outlined the proposed deal components, which include comprehensive market access for American goods, economic security commitments and digital trade alignment. Trump also suggested the revival of the Keystone XL pipeline as part of the broader agreement. The pipeline, which would connect Alberta to the US and carry 830,000 barrels of oil a day, was blocked by previous administrations. The US Chamber of Commerce has urged a swift resolution, warning that higher tariffs would damage both economies and disrupt supply chains.