Trump pauses 50% tariff on Canada in last-minute deal

US President Donald Trump has said that he has paused a planned 50 percent tariff increase on Canadian goods ahead of a midnight deadline.

"I have paused the 50% Tariffs against Canada, that were scheduled to kick in tomorrow morning for a three-day period, based on the fact that Canada and the U.S.A., subject to the finalisation of documents, have a deal!" he said on his Truth Social platform on Tuesday.

Trump also suggested the agreement could revive the Keystone XL pipeline, a major cross-border energy project that was cancelled during the previous Biden administration.

"The great Keystone XL Pipeline, long ago killed by Sleepy Joe Biden, may be awoken from the grave!" he said.

The announcement followed a phone call on Tuesday between Trump and Canadian Prime Minister Mark Carney, who was seeking to reach an agreement to avert tariffs on roughly $22 billion in Canadian goods.

Trump took Carney's call, and according to the prime minister's office, the two spoke on the "ongoing negotiations."

The two leaders had also spoken on Monday after their representatives held discussions, but no deal was reached. Negotiations have been ongoing for weeks.

A sticking point is which tariffs would apply to Canadian autos destined for the US, CBC News learned.

Trump invoked Section 338 of the Tariff Act of 1930 in July to levy a 50 percent ad valorem duty on specific Canadian imports effective August 19.

He said he would impose a broad range of tariffs on Canada, citing Canada's discriminatory treatment of US dairy, automobiles and alcoholic beverages when he kicked off his trade war with his northern neighbour last year.

Canadian Trade Minister Dominic LeBlanc is trying to wrangle as much as he can from the US side, including scrapping the Section 338 tariffs and securing relief on some industrial products like steel, aluminium, autos and lumber, CBC News reported.

On their side, the US wants an end to the Canadian boycott of US liquor and the products put back on Canadian shelves.

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Source: TRT