US President Donald Trump said late Tuesday that the United States and Canada had reached an agreement that would temporarily halt the introduction of new tariffs on Canadian goods, offering a brief reprieve after weeks of tense trade negotiations.
Trump said the United States would pause for three days the implementation of new 50% tariffs that had been scheduled to take effect on Canadian goods on Wednesday. He said the decision was based on the two countries having reached a deal, subject to the finalization of the necessary documents.
However, Canadian Prime Minister Mark Carney struck a more cautious tone. About an hour after Trump’s announcement, Carney said that “substantial progress has been made, although there is important work still to be done.”
The differing statements suggested that while Washington and Ottawa had moved closer to an agreement, the final details had yet to be completed.
Trump and Carney Hold Second Conversation This Week
Trump’s announcement followed a conversation with Carney on Tuesday afternoon. It was reportedly the second time the two leaders had spoken during the week, as officials from both countries continued intensive negotiations.
The discussions have taken place against the backdrop of growing uncertainty for businesses on both sides of the border.
The proposed tariffs would have affected roughly $20 billion worth of Canadian imports and would have applied regardless of whether the goods qualified for preferential treatment under the US-Mexico-Canada Agreement, or USMCA.
The trade agreement has protected a large portion of Canadian industry from earlier US tariffs.
Trump also mentioned the possibility of reviving the Keystone XL Pipeline, a major energy infrastructure project that former US President Joe Biden cancelled in 2021 following years of opposition from Indigenous groups and environmental organizations. Trump did not provide details about what he meant by potentially bringing the project back.
My statement on ongoing Canada-U.S. trade negotiations: pic.twitter.com/rzWZJFYe8e
— Mark Carney (@MarkJCarney) August 19, 2026
Billions of Dollars at Stake for Businesses
The potential tariffs have raised concerns among Canadian businesses and trade officials, particularly in sectors such as lumber, wine and dairy.
Canadian Chamber of Commerce CEO Candace Laing warned that billions of dollars in goods that had previously avoided the tariffs could now face significant disruption.
She said businesses had spent more than a year delaying hiring, investment and expansion decisions because of uncertainty surrounding Canada’s trade relationship with the United States.
The dispute could also complicate wider negotiations over the future of the USMCA, adding another layer of uncertainty to the North American trading relationship.
Auto Tariffs Remain a Major Dispute
Automobiles have emerged as one of the most difficult issues in the negotiations.
Two industry sources familiar with the discussions said US tariffs on Canadian vehicles remained a major sticking point. The two countries have reportedly discussed reducing the US Section 232 tariffs on Canadian vehicles from 25% to 15%, with the possibility of further reductions depending on how much US content is used in each vehicle.
However, the precise terms of any agreement announced by Trump remained unclear.
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Another important disagreement involved how the amount of US content in vehicles should be calculated when determining tariff deductions.
Washington reportedly wanted only content produced in the United States to count, while Canada pushed for all North American content, including parts manufactured in Canada and Mexico, to qualify.
Negotiations Continue Despite Temporary Pause
Canadian officials responsible for trade with the United States, including Minister Dominic LeBlanc and chief trade negotiator Janice Charette, have been in Washington since the previous week for negotiations.
On Monday, they held nearly two hours of talks with US Trade Representative Jamieson Greer and Commerce Secretary Howard Lutnick.
US officials have raised several concerns during the negotiations, including Canadian tariffs imposed in response to earlier US measures, restrictions by some Canadian provinces on US liquor and Canada’s dairy supply management system.
Meanwhile, the US Commerce Department introduced new rules on Tuesday requiring automakers exporting vehicles from Canada and Mexico to certify their current levels of US content for tariff deductions. The rules reduce the certification process from twice a year to once annually.
The Federal Register notice, however, said automakers would need to re-certify the US content of vehicles by September 30 to qualify for deductions under the new annual cycle beginning December 1.
For now, the three-day pause gives negotiators additional time to finalize the agreement. While Trump’s announcement points to a possible breakthrough, Carney’s comments indicate that significant work remains before the deal can be considered fully settled.
