The U.S. will wait three days before implementing new tariffs on Canadian goods as negotiations between the two countries continue. President Donald Trump commented on the situation: "I have suspended the 50% tariffs against Canada, which were supposed to take effect tomorrow morning, for three days."
He also claimed that the countries have already reached an agreement and are now finalizing the remaining paperwork.
Canadian Prime Minister Mark Carney also noted that negotiations have made significant progress, although important work remains.This was the second phone call this week between Trump and Carney, building on weeks of negotiations since July. The American president initially set a new deadline for implementing Canadian tariffs for August 19.
Trump hinted the deal could revive the Keystone XL pipeline project
Disagreements between the two countries mainly concern American automotive tariffs and Canadian provincial bans on American alcohol. In a message on the White House website, Trump stated that Canada has promised to consider U.S. complaints regarding tariffs on dairy products, alcohol, and automobiles.
He also hinted that a definitive trade deal could facilitate the revival of the Keystone XL project—an oil pipeline intended to connect Alberta with the United States, which was rejected during the Obama and Biden presidencies.
However, the pipeline has faced long-standing opposition from environmentalists and indigenous communities, but Trump has repeatedly called for the project to be revived. It would transport about 830,000 barrels of oil per day.
The office of U.S. Trade Representative Jamieson Greer also issued a statement. It noted that the agreement between the U.S. and Canada should expand market access for American goods while aligning the positions of the two countries on digital trade and economic security. Additionally, it stated that the agreement would contain "many important provisions that will continue to protect our market and American workers, as well as our Canadian partners."
However, as Canadian representative Carney recently stated, the priority will be to create a stronger, more self-sufficient, and competitive economy in the global market. Although Canadian negotiators and representatives of cross-border companies welcomed the three-day extension for new tariffs after repeated warnings that they would harm both economies.
Sources report both countries considered implementing 15% tariffs
The latest tariffs proposed by Trump target Canadian wine, dairy products, cement, clothing, and hockey equipment, adding to existing U.S. tariffs on Canadian steel, aluminum, automobiles, and lumber. Canada remains focused on securing a trade deal that would eliminate or significantly reduce U.S. tariffs in these key areas.
Meanwhile, the U.S. wants Canada to remove retaliatory tariffs on automobiles and expand dairy quotas, allowing imports of American cheese. The U.S. is also asking Canada to lift the ban on American alcohol, imposed by most provinces last year in response to Trump's tariffs.
According to sources, before Wednesday's deadline, American and Canadian negotiators were working on an agreement that could reduce tariffs on Canadian automobiles from 25% to 15%. However, insiders claim the sides are divided on which vehicles would qualify for the lower rates, with the U.S. insisting on vehicles that predominantly use American components.
Furthermore, Canada needs to secure the cooperation of provincial premiers to resume the sale of American alcohol, as alcohol regulation falls exclusively under provincial, not federal, jurisdiction. Ontario Premier Doug Ford, whose jurisdiction is most heavily impacted by U.S. automotive tariffs, has so far only expressed willingness to lift restrictions once a fair deal is reached.
The three-day pause gives negotiators a narrow window to resolve remaining disagreements before the tariff increases could take effect. Failure to reach an agreement could reignite concerns among manufacturers and businesses heavily reliant on cross-border supply chains.
The U.S. and Canadian economies are deeply integrated, with billions of dollars in goods moving between the two countries monthly. Therefore, tariff increases could raise costs for businesses and consumers and disrupt industries dependent on components and raw materials supplied from abroad.
For Canada, these negotiations also occur against the backdrop of Ottawa's efforts to reduce its dependence on the U.S. market by expanding trade ties with other countries.
Carney is increasingly emphasizing economic resilience and diversification, suggesting that Canada wants any agreement with Washington to strengthen its position rather than make the country vulnerable to future tariff threats.
Thus, the next three days could prove decisive in determining whether both sides can turn the progress made into a broader and longer-term trade agreement.
