Trump Grants Canada Three-Day Tariff Reprieve, Temporarily Halting 50% Duties On Goods

US President Donald Trump has paused the planned imposition of 50 per cent tariffs on selected Canadian goods for three days, saying Washington and Ottawa were close to finalising a broader trade agreement. The decision came just hours before a midnight deadline and followed weeks of intense negotiations between the two countries over changes to their existing trade framework. Trump announced the three-day reprieve late Tuesday, saying the decision was based on what he described as progress towards a deal with Canada. In a post on his Truth Social platform, Trump said the United States and Canada had a "DEAL", subject to the finalisation of the necessary documents.

The temporary suspension gives negotiators additional time to complete the outstanding details and potentially avoid the tariffs. Canadian Prime Minister Mark Carney struck a more cautious tone in his response. While acknowledging that "substantial progress has been made" towards a comprehensive trade agreement, Carney said important work remained before the deal could be considered final. His comments suggested that the two governments had narrowed their differences but had yet to resolve all outstanding issues. Washington and Ottawa have been negotiating revisions to the United States-Canada-Mexico Agreement, or USMCA, which Trump signed and promoted during his first presidential term.

Trump has since argued that changes are necessary to address what he considers unfair trade arrangements. The latest negotiations have focused on market access, economic security and other areas of the bilateral trading relationship. The US Trade Representative's office said on social media that the prospective agreement would include comprehensive market access for American goods, economic security commitments and alignment on digital trade, among other provisions. The proposed changes are intended to address broader US concerns while creating a more predictable framework for trade between the two North American economies. Trump's proclamation suspending the tariffs said Canada had expressed a commitment to remove what Washington described as discriminatory, unreasonable and unequal measures at issue.

Also Read: Trump, PM Modi to Resolve Tariff Row Over Russian Oil Trade: US Official

The administration has used tariffs as a major tool in its trade policy, arguing that such measures can encourage trading partners to change policies that the US considers disadvantageous to American businesses. The threatened tariffs had raised concerns among Canadian businesses and workers because of the close integration between the economies of the two countries. Canada and the United States maintain extensive cross-border trade involving manufactured goods, agriculture, energy and other sectors. A sharp increase in tariffs could therefore have affected businesses and consumers on both sides of the border.

Carney said the proposed agreement was intended to resolve outstanding trade disputes while providing greater certainty and tangible benefits for Canadian businesses, workers, farmers and families. His government has sought to secure improved trading conditions while protecting Canada's economic interests during negotiations with Washington. The three-day pause now gives negotiators a limited window to complete the remaining work. While Trump has characterised the discussions as having reached a deal, Canada's more measured assessment indicates that the agreement is not yet fully finalised. The outcome of the negotiations over the next three days will determine whether the threatened 50 per cent tariffs are permanently avoided or return as a major source of tension between the two countries.

Also Read: Trump Announces Phased Tariffs Up to 200% on Generic Drug Imports