US pauses 50% Canada tariffs for three days as trade talks continue
Canada temporarily avoided a 50% US tariff after late negotiations, but Prime Minister Mark Carney said a final trade agreement still required more work.
In short
- Canada temporarily avoided a 50% US tariff after late negotiations, but Prime Minister Mark Carney said a final trade agreement still required more work.
The United States has delayed a threatened 50% tariff on a range of Canadian goods for three days after last-minute negotiations produced what both sides described as progress toward a trade agreement.
US President Donald Trump announced the pause late on Tuesday, August 18, 2026, hours before the higher duties were due to take effect. Canadian Prime Minister Mark Carney said substantial progress had been made but cautioned that further work was needed, indicating that the arrangement was not yet a completed trade settlement.
The proposed tariffs would have covered about $20 billion in Canadian exports, including products such as wine and hockey sticks. The dispute follows earlier reciprocal trade measures and renewed friction over access for US-made vehicles, alcohol and dairy products.
Trump also suggested the long-stalled Keystone XL oil pipeline could be revived, although he did not explain whether the project formed part of the tariff negotiations. The pipeline, proposed to carry Canadian oil to US refineries, was halted in 2021 after a key US permit was revoked.
The three-day delay reduces the immediate risk of a sharp escalation, but businesses on both sides of the border remain exposed until the governments finalize and disclose the terms of any agreement.
