Trump pauses new tariffs on Canada for three days, saying deal close

August 19, 2026

President Trump announced a three-day pause on imposing 50% tariffs on approximately $20 billion worth of Canadian goods, stating that the two countries are close to finalizing a trade agreement. The delay came less than two hours before the tariffs were scheduled to take effect on August 19, 2026. Negotiations between the US and Canada have focused on resolving disputes over automotive tariffs, Canadian dairy market access, and provincial bans on American alcohol sales that were imposed as retaliation to earlier US tariffs.

Who is affected

US President Donald Trump and Canadian Prime Minister Mark Carney
Trade negotiators from both the United States and Canada
US Trade Representative Jamieson Greer
Ontario Premier Doug Ford and other Canadian provincial premiers
Businesses on both sides of the US-Canada border
US cheese producers
Canadian wine, dairy, cement, clothing, and hockey equipment exporters
13 million American workers whose jobs depend on trade under the US-Mexico-Canada Trade Agreement
US Chamber of Commerce
Environmentalists and indigenous groups (regarding Keystone XL pipeline)

What action is being taken

Trump is pausing the 50% tariff on Canadian goods for a three-day period
Trade negotiators from both countries have been engaged in intense talks since July
Trump and Prime Minister Carney spoke twice this week
The two countries are finalizing documents for a trade deal
Negotiators are discussing a deal that would reduce US tariffs on Canadian autos from 25% to 15%

Why it matters

The tariff pause and potential trade deal are significant because the threatened tariffs would have applied to nearly $20 billion of Canadian imports across multiple sectors, which would have damaged both economies and disrupted critical supply chains. The US Chamber of Commerce warned that higher tariffs would drive up costs for American families and risk 13 million American jobs dependent on trade under the US-Mexico-Canada Trade Agreement. This situation represents a critical moment in the trade relationship between two major trading partners, where decades of free trade have been upended by Trump's global tariff program since his return to office, creating mounting tensions that affect workers, businesses, and consumers in both countries.

What's next

The three-day pause on tariffs provides time to finalize trade deal documents
Canada needs to pursue buy-in from provincial premiers to reinstate US alcohol sales
Ontario Premier Doug Ford has indicated openness to lifting the liquor ban only if a "fair deal" is reached
Negotiators still need to resolve disagreements on which vehicles would be eligible for tariff reductions
The final trade deal may include revival of the Keystone XL pipeline project

Read full article from source: BBC