Trump Delays 50% Canada Tariffs on $20Billion of Imports Just Hours Before Deadline After Last-Minute Trade Deal

President Donald Trump has put a last-minute hold on sweeping 50 per cent US tariffs on $20 billion worth of Canadian imports, announcing in Washington on Tuesday that a provisional trade deal had bought both sides an extra three days to finalise terms.

The threatened tariffs, due to hit from 12.01am on Wednesday, would have applied to a wide range of products and risked a further rupture in already tense cross-border relations. Trump revealed the pause on his Truth Social platform, presenting it as proof of his leverage.

'I have paused the 50% tariffs against Canada, that were scheduled to kick in tomorrow morning for a three day period, based on the fact that Canada and the USA, subject to the finalization of documents, have a DEAL!' he wrote.

A White House proclamation said Canada had 'expressed a commitment' to scrap measures Washington regards as discriminatory against US alcohol, dairy and motor vehicle exports. Canadian officials did not echo that language and had not confirmed those specific commitments as of Tuesday night.

Carney Strikes Cooler Tone as Three-Day Clock Starts Ticking

Prime Minister Mark Carney struck a noticeably cooler tone, saying 'substantial progress' had been made but stressing that 'important work remained'. He confirmed only that Ottawa had agreed to the three-day delay while talks continued.

Carney's office said he and Trump had spoken twice in the previous two days, including a call on Tuesday afternoon. The tariff threat is the latest point of contention in a relationship that has deteriorated under Trump's second term.

The two neighbours, who traded $880 billion in goods and services last year according to US figures, are in rolling disputes over dairy, cars and industrial goods. Nearly 72 per cent of Canada's goods exports last year went to the United States, a dependence that gives Washington leverage but also makes any miscalculation economically painful for both sides.

Ryan Majerus, a partner at King & Spalding and former US trade official, spoke before the delay was announced. He said: 'I don't think either side really wants these tariffs to come into effect. There's a pretty strong push on both sides to find an off-ramp here.'

Business groups were unimpressed with the three-day reprieve. Canadian Chamber of Commerce president and CEO Candace Laing called it 'some relief' for companies but said it fell well short of the stability a signed interim deal would provide. She added: 'This limbo state is not anyone's preferred outcome.'

Depression-Era Tariff Weapon Brought Back Into Play

The tariff threat reflects Trump's broader push to make tariffs central to his economic agenda. Last year he imposed double-digit import taxes on almost every country, calling the US trade deficit a 'national emergency'.

In February, the Supreme Court ruled that he had exceeded his authority, striking down those measures and forcing the government to prepare refunds for importers. To target Canada instead, Trump invoked Section 338 of the Tariff Act of 1930.

The provision allows the president to impose tariffs of up to 50 per cent on imports from countries deemed to discriminate against US businesses, without requiring an investigation or setting a time limit. It has never previously been used, and its parent law, the Smoot-Hawley Tariff Act, is widely blamed by economists for worsening the global downturn of the 1930s.

The dispute is unfolding alongside the renegotiation of the US-Mexico-Canada Agreement, the North American trade pact agreed during Trump's first term. The threat of Section 338 tariffs gives Washington additional leverage as it presses Ottawa for concessions on agriculture and autos.

Trump has repeatedly floated the idea of Canada becoming 'the 51st state'. For Canadian officials and businesses now facing a three-day countdown, his approach suggests the current pause could prove as fragile as it was unexpected.