President Donald Trump announced a last-minute pause on 50% tariffs against Canadian goods, just hours before they were set to take effect at midnight on August 19, 2026. The White House confirmed the decision, which Trump posted on Truth Social, saying the two countries had reached a deal subject to finalizing documents.
The tariffs had been scheduled to hit about $20 billion worth of Canadian goods, including cement and hockey sticks. The pause gives both sides three days to finalize terms. Trump said the agreement could also include the revival of the Keystone XL Pipeline, which was canceled by President Biden in 2021 and would carry 830,000 barrels per day from Alberta to the Gulf Coast.
Canadian Prime Minister Mark Carney confirmed the pause, saying “substantial progress has been made, although there is important work still to be done.” He described earlier talks as “very intense and delicate.”
The dispute began after Trump announced plans for the 50% tariffs last month, citing what the US called discriminatory trade practices by Canada. The targeted areas included automobiles, dairy products, and alcohol. The tariffs were set to be imposed using Section 338 of the Tariff Act of 1930, a rarely used law allowing retaliation against countries with discriminatory trade policies. Trump had to use this tool after the Supreme Court struck down emergency powers previously used for sweeping global tariffs.
Negotiations have focused on market access, dairy, alcohol, and auto sector concessions. Canada has been pushing for the US to lift existing duties on cars, steel, and lumber, while the US has demanded broader market access, including the return of American wine and spirits to Canadian store shelves. US Trade Representative Jamieson Greer said any deal would include “comprehensive market access for all American goods, economic security commitments, and digital trade alignment.”
An analysis by Veda Partners found that the new tariffs would have raised the average tariff rate on Canadian exports to the US from 4.68% to 6.27%. In practice, only about 5% of Canadian goods imported by the US last year would have faced new duties.
The Canadian Chamber of Commerce welcomed the pause but said it does not replace the need for a signed deal. “An extension doesn’t bring the certainty that a signed interim deal would,” said Chamber president Candace Laing. The outcome of these talks could also shape the future of the US-Mexico-Canada Trade Agreement, which is up for renewal.
