US President Donald Trump has put a three-day hold on planned 50% tariffs on a range of Canadian imports, giving negotiators from both countries additional time to finalise a trade agreement.

The tariffs were due to begin just hours after Trump's announcement. The proposed measures would have affected about $20 billion worth of Canadian goods and risked further worsening trade relations between the two North American neighbours.

Last-Minute Push for a Deal

Trump said the tariff suspension was linked to progress in negotiations between Washington and Ottawa. He indicated that the two sides had reached an agreement in principle, although the final documents still need to be completed.

Canadian Prime Minister Mark Carney also acknowledged progress but made clear that negotiations were not finished. The two leaders have spoken twice this week, while trade officials have held intensive discussions in an effort to resolve the remaining disputes.

The latest tariff threat had targeted a variety of Canadian products, including wine, dairy goods, clothing, cement and hockey equipment. The new duties would have added to existing US tariffs affecting several important Canadian industries.

Key Trade Issues Remain

Automobiles are among the most difficult issues in the negotiations. The two countries have discussed lowering the US tariff on Canadian vehicles, but disagreements remain over which vehicles would qualify for preferential treatment and how much American-made content they should contain.

Washington has also pushed Canada to provide greater access to US dairy products and remove restrictions on American alcohol sales imposed by several Canadian provinces.

For Canadian businesses, the three-day pause provides valuable breathing room. A higher tariff would increase the cost of exporting goods to the US and could place additional pressure on companies that depend heavily on cross-border trade.

Keystone XL Pipeline Back in Focus

Trump has also suggested that a future trade agreement could open the door to reviving the Keystone XL oil pipeline project, which was cancelled under former US President Joe Biden.

The proposed pipeline would transport crude oil from Alberta to the United States. However, the project has faced longstanding opposition from environmental groups and Indigenous communities.

The US Trade Representative's office said the emerging agreement could cover broader access for American products, economic security measures and cooperation on digital trade. It also indicated that protections for American workers and businesses would remain part of the arrangement.

Businesses Welcome Tariff Pause

The temporary suspension has been welcomed by businesses concerned about another escalation in the US-Canada trade dispute. The US Chamber of Commerce has warned that increased tariffs could raise costs, disrupt supply chains and put jobs dependent on North American trade at risk.

The latest development therefore offers both countries a short opportunity to turn weeks of difficult negotiations into a formal agreement. If the remaining issues can be resolved within the three-day window, Washington and Ottawa could avoid another sharp escalation in their already strained trading relationship.