Trump pauses 50% tariffs on Canada after announcing potential deal

Trump Halts Imminent 50% Tariffs on Canadian Goods, Citing Breakthrough Deal

WASHINGTON D.C. – In a dramatic late-night announcement, President Donald Trump declared on Tuesday that he has paused the imposition of hefty 50% tariffs on Canadian imports, mere hours before they were slated to take effect. The decision comes after what Trump described as a "DEAL" reached between the United States and Canada, pending final documentation.

The tariffs, which were scheduled to kick in on Wednesday morning for a three-day period under the Tariff Act of 1930, threatened to impact approximately $20 billion worth of Canadian goods, including a diverse range of products from liquor and dairy to vehicles and hockey equipment. The sudden halt signifies a potential de-escalation in a brewing trade dispute that had raised concerns on both sides of the border.

"I have paused the 50% Tariffs against Canada," Trump posted on Truth Social, "based on the fact that Canada and the U.S.A., subject to the finalization of documents, have a DEAL!" In the same message, he provocatively added, "The great Keystone XL Pipeline, long ago killed by Sleepy Joe Biden, may be awoken from the grave!" hinting at broader implications of the agreement.

The impending duties would have cast a wide net over Canadian exports, encompassing various food products, wearables, synthetic materials, and industrial goods, creating significant economic uncertainty for businesses and consumers alike.

Sources indicate that President Trump engaged in multiple conversations with Canadian Prime Minister Mark Carney, including a late-night call on Monday and another discussion on Tuesday afternoon, preceding the announcement. These high-level dialogues appear to have been pivotal in brokering the nascent agreement.

The Office of the United States Trade Representative (USTR) subsequently provided additional context, detailing that the agreement aims to address critical areas such as market access, economic security, and digital trade. A statement from the USTR lauded the development, saying, "Congratulations Mr. President. The deal will include comprehensive market access for all American goods, economic security commitments, digital trade alignment, and many important provisions that will continue to protect our market and American workers, along with our Canadian partners."

Canadian Prime Minister Mark Carney, in a statement released Tuesday night, confirmed the intensive negotiations. "Over the last number of weeks, Canada has engaged in intensive discussions with the United States to address outstanding trade issues and deliver greater certainty and real benefits for Canadian businesses, workers, farmers and families," Carney said. While acknowledging "substantial progress," he cautioned that "important work still needs to be done." He further elaborated that the U.S. agreed to postpone the implementation of the 50% tariffs until the end of the day on August 21st, allowing more time for the finalization of the deal.

The proposed tariffs originated in June, with the Trump administration citing what it termed "discrimination" against American businesses. Presidential proclamations previously highlighted Canada’s 25% tariff regime, in place since April 9, 2025, specifically targeting American-made motor vehicles and parts. The administration had also accused Canada of utilizing a quota system that limited tariff-free entry for U.S.-made vehicles and allegedly pressured American companies to maintain manufacturing operations north of the border.

At the time, Prime Minister Carney had strongly condemned the Trump administration’s tariff plans, labeling them a "direct violation" of the Canada-United States-Mexico Agreement (CUSMA), the free trade pact governing the three North American nations.

This is a developing story, and further details regarding the finalized agreement and its broader economic and political ramifications are expected to emerge in the coming days.

FOX Business’ Bonny Chu contributed to this report.