Key Points
- Trump says US and Canada have reached a deal
- Carney says substantial progress made, but work remains
ISLAMABAD: US President Donald Trump has paused, for three days, a planned 50 per cent tariff on about $20 billion in Canadian imports.
According to the US President, Washington and Ottawa had reached a deal, but Canadian Prime Minister Mark Carney said significant work remained.
Trump announced the delay shortly before the tariffs were due to take effect, saying the two countries had a deal “subject to the finalisation of documents”.
The move followed a second conversation between Trump and Carney this week and weeks of intense negotiations.
Carney subsequently said “substantial progress” had been made but stressed that “important work” was still to be done, signalling that the announcement does not yet represent a fully concluded trade agreement.
The proposed tariffs would have covered a range of Canadian products, including dairy goods, wine, lumber, industrial machinery, electronics and other consumer products.
Canadian businesses had warned that the measures could disrupt supply chains and raise costs for exporters.
READ ALSO: Canada Expresses Disappointment Over New US Tariffs
A major sticking point has been US tariffs on Canadian automobiles and the rules governing the calculation of North American content.
Washington has pushed for US-made components to receive preferential treatment, whereas Canada has sought broader recognition of North American content.
Discussions have also considered reducing the existing 25 per cent US tariff on Canadian vehicles to 15 per cent, with further reductions potentially linked to US content.
Trump vows to revive pipline
Trump also raised the possibility of reviving the Keystone XL pipeline, a major cross-border oil project cancelled by former US president Joe Biden in 2021.
Details on whether the pipeline would form part of any final trade arrangement remain unclear.
The three-day pause gives negotiators a narrow window to complete the outstanding terms and formalise the agreement.
If talks fail, the threatened 50 per cent duties could return, renewing pressure on businesses and further straining economic ties between the two North American neighbours.
Trump announced the 50 per cent tariff on Candian exports to US and then within hour paused it. This brought US-Canada trade dispute to the centre stage again.
The trade dispute primarily includes tariffs on automobiles, steel, aluminium and other products. It has rendered businesses on both sides facing continuing uncertainty over the future of cross-border trade.
The United States and Canada have spent the past 18 months locked in their most serious trade dispute in decades, with tariffs, retaliatory measures and negotiations repeatedly reshaping one of the world’s largest bilateral trading relationships.
The dispute escalated in 2025 after US President Donald Trump imposed tariffs on Canadian goods, citing concerns over border security, drug trafficking and what Washington described as unfair Canadian trade practices.
Canada responded with retaliatory duties on US products, including steel, aluminium and automobiles. The measures disrupted deeply integrated North American supply chains, particularly in the auto industry.
The latest confrontation centres on a threatened 50 per cent US tariff on about $20 billion of additional Canadian imports, ranging from wine and dairy products to hockey equipment and building materials.
Trump announced on August 18 a three-day pause after talks with Canadian Prime Minister Mark Carney, calling the move a preliminary deal. Carney said substantial progress had been made but that important work remained.
The United States and Canada have spent the past 18 months locked in their most serious trade dispute in decades, with tariffs, retaliatory measures and negotiations repeatedly reshaping one of the world’s largest bilateral trading relationships.
The dispute escalated in 2025 after US President Donald Trump imposed tariffs on Canadian goods, citing concerns over border security, drug trafficking and what Washington described as unfair Canadian trade practices.
Canada responded with retaliatory duties on US products, including steel, aluminium and automobiles. The measures disrupted deeply integrated North American supply chains, particularly in the auto industry.
US tariffs have since remained in force on several major Canadian sectors, including steel, aluminium, vehicles and forest products. Canada has maintained retaliatory measures on selected US goods, although some exemptions and adjustments have been introduced as negotiations continued.
