Carney reports ‘substantial progress’ but says work remains

Trump announced the reprieve on social media late Tuesday, writing that he had paused the tariffs for three days “based on the fact that Canada and the USA, subject to the finalization of documents, have a DEAL!” The agreement was reached hours before the duties were set to take effect.

Canadian Prime Minister Mark Carney, speaking after Trump’s announcement, said “substantial progress” had been made toward a trade deal but more work remained. Carney told reporters on Monday that top officials from the two countries had been engaged in “intense and delicate” talks in the days leading to the agreement.

The 50% tariffs, announced by the White House in July 2026, were justified by the Trump administration on the grounds that Canada had discriminated against US-produced cars, alcohol, and dairy products. The duties would have affected approximately $20bn worth of Canadian exports, including wine and hockey sticks, according to The Guardian. Certain goods previously protected from import taxes under the USMCA deal were not shielded from the latest round of tariffs.

Canadian business owners had expressed concern about financial devastation and untenable export costs from the proposed levy, the CBC reported.

In the same social media post announcing the pause, Trump wrote that the Keystone XL pipeline project “may be awoken from the grave,” without elaborating on whether the revival was tied to the tariff agreement or providing further details.

Keystone XL, first proposed in 2008 to carry oil from Canada’s western tar sands to US refiners, was halted in 2021 by owner TC Energy after President Joe Biden revoked a key permit needed for a US stretch of the 1,200-mile (1,930km) project. The pipeline drew opposition from US landowners, Native American tribes, and environmentalists.

Other North American oil pipelines, including Dakota Access and Enbridge Line 3, have faced sustained opposition from environmental groups concerned about spills.

The Tuesday deal caps a year of disputes for US-Canada relations. In February 2025, the White House hit Canada with a 25% tariff, citing what it regarded as inadequate progress in curbing cross-border illegal immigration and drug trafficking. Canada announced a reciprocal levy, calling the US actions “unwarranted and unreasonable,” and maintained that it had launched a robust border protection plan and that less than 1% of fentanyl and illegal crossings came from Canada.

Trump has also publicly mused about turning Canada into a US state during the dispute.

In 2024, trade between the US and Canada was estimated at roughly $909bn, according to the office of the US trade representative.