Tariffs on hold as Trump claims Canada deal near
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The gist
Trump paused 50% tariffs on Canada for three days, claiming a deal is near. The pause averts duties on $20bn of goods but hinges on finalizing documents.
Background
The U.S. and Canada have been locked in a trade dispute, with Trump threatening 50% tariffs on Canadian goods under Section 338 of the Smoot-Hawley Tariff Act, citing alleged discrimination against American autos, alcohol, and dairy. The tariffs were set to take effect at midnight on Wednesday, but Trump announced a three-day pause on Tuesday night, saying a deal was close. However, Canadian Prime Minister Mark Carney was more cautious, saying only that substantial progress had been made. The two sides have been negotiating intensely since July, with key sticking points including U.S. tariffs on Canadian vehicles and Canadian provinces' bans on U.S. liquor.
How it unfolded
- Jul 2026Trump threatened new 50% tariffs on Canadian goods, setting a deadline of August 19.
- Aug 18, 2026Carney and Trump spoke by phone as negotiations intensified. Trump signed orders for the tariffs earlier.
- Aug 18, 2026 22:30Trump announced on social media a three-day pause on the tariffs, claiming a deal was near.
- Aug 19, 2026The pause took effect, averting the midnight deadline. Carney confirmed the postponement until end of day Friday.
Who’s saying what
- Official
- Trump said: 'I have paused the 50% Tariffs against Canada... based on the fact that Canada and the U.S.A., subject to the finalization of documents, have a DEAL!'
- Official
- Carney said only that substantial progress had been made, not confirming a full deal.
- Analysts
- Some briefed on the talks were cautiously optimistic, while others believed the sides were still far apart.
- Caution
- Trump has previously announced deals that fell through, including with Iran, raising doubts about the finalization.
Still unverified
The specific terms of the deal, including any concessions by Canada, have not been publicly detailed. Reports of a possible reduction in U.S. auto tariffs to 15% from 25% are based on anonymous sources.