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Trump pauses 50% scheduled tariffs on Canada for three days, announces ‘deal’ with Ottawa

Business
Updated:
Chris Washington
By Chris Washington
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Trump pauses 50% scheduled tariffs on Canada for three days, announces ‘deal’ with Ottawa
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President Donald Trump late Tuesday stateside paused imposing 50% tariffs on certain Canadian imports, shortly before the duties were set to kick in at midnight.

In a post on Truth Social, Trump said that this was “based on the fact that Canada and the U.S.A., subject to the finalization of documents, have a DEAL!”

This announcement comes after Trump and Canadian Prime Minister Mark Carney held trade talks on Tuesday.

In his post, Trump also suggested that the Keystone XL pipeline could be “awoken from the grave!” The pipeline refers to an extension of a pipeline system in Canada and the United States.

Trump had authorized the project in his first term, but former President Joe Biden had revoked the permits in 2021.

The 50% tariffs would have impacted imports of hockey sticks, wine and an array of other Canadian imports, and were unveiled last month in response to what the Trump administration called Canadian trade discrimination in the motor vehicle, alcohol and dairy industries.

They were being imposed under Section 338 of the Tariff Act of 1930, a Great Depression-era law that has rarely, if ever, been invoked and has been neglected for decades.

The new tariffs would have covered roughly $20 billion worth of Canadian imports, according to the Office of the U.S. Trade Representative.

While that’s a fraction of the $382 billion that the U.S. imported from Canada last year, the high rate on targeted products could still pose major challenges to Canadian sellers.

“A 50% tariff essentially makes a product uneconomic to sell into a particular market,” said Dan Kelly, president of the Canadian Federation of Independent Business, in an interview with WHNY News.

Many of the group’s 103,000 members said the new tariffs could “grind their U.S. sales to a halt” if implemented, Kelly said. Some businesses reported already seeing U.S. buyers hold off on future orders in anticipation of the new duties, he said.

Trump has already imposed a variety of tariffs on Canada and its specific exports, including metals, lumber and auto parts. Trump also imposed hefty tariffs on Canada over alleged drug-trafficking concerns, but the Supreme Court struck those down in February.

But the Section 338 tariffs “really strike at the heart of small business trade between Canada and the United States,” because so many of the targeted products are consumer-oriented, said Kelly.

“It’s deeply worrisome for a huge swath of Canadian businesses,” he said.

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Some of the Trump administration’s tariffs on Canada include exemptions for goods compliant with the trilateral North American trade deal known as USMCA.

Last month, the Trump administration said it would not renew that trade agreement, triggering a series of annual reviews that raise questions about the treaty’s future.

Neil Herrington, the U.S. Chamber of Commerce’s senior vice president for the Americas, said in a statement Tuesday morning that new higher tariffs “would damage both economies, drive up costs for U.S. families, further disrupt critical supply chains, and risk the 13 million American jobs that depend on trade” under the USMCA.

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Chris Washington
Chris Washingtonhttps://whnynews.com
Chris Washington brings over 25 years of experience in financial journalism to WHNY News. A Schenectady native, Chris has a keen eye for business trends impacting upstate New York. His insightful reporting has earned him numerous accolades. Chris holds a degree in Economics from Syracuse University.
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