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Tariff pause and pipeline
The United States and Canada reached a last-minute deal to delay steep tariffs on billions of dollars of Canadian goods, with US President Donald Trump announcing the pause shortly before a 50-percent duty was due to take effect at midnight.
“US President Donald Trump made the announcement shortly before the 50-percent duty was due to take effect at midnight.”
Trump said the three-day pause was “subject to finalization of documents,” and the agreement was linked to his efforts to revive the Keystone XL Pipeline, which he said was “long ago killed by Sleepy Joe Biden” and “may be awoken from the grave!”
The pause came after Trump and Canadian Prime Minister Mark Carney held talks on Tuesday aimed at finding common ground after weeks of fraught trade negotiations.
Al Jazeera reported that the tariffs would have applied to some $20.2bn worth of Canadian exports, affecting goods ranging from electronics and industrial machinery to furniture, dairy products and wine.
The Keystone XL Pipeline, which would transport about 830,000 barrels of crude oil each day between Alberta and Nebraska, was described in the sources as having been effectively killed after Joe Biden revoked a key permit for the US stretch in 2021.
Negotiations and reactions
Canadian Prime Minister Mark Carney confirmed shortly afterwards that the US had agreed to suspend the tariffs until August 22, while describing the talks as having made “substantial progress” but still requiring “important work still to be done.”
Carney said that “Canada remains focused on building a stronger, more independent, and more competitive economy at home,” as the pause was framed as a temporary reprieve for exporters fearful of a renewed trade war.
Al Jazeera quoted professor Andreas Schotter, saying the inclusion of Keystone XL in the negotiations appeared to be an attempt to play to Trump’s ego, because “it was President Biden who actually stopped it.”
Schotter added, “Let’s see if we really get to a deal by Friday or if we are back at a Groundhog Day moment,” as the sources described the negotiations as fraught and still incomplete.
The US Trade Representative Jamieson Greer also reacted to Trump’s announcement on X, saying, “Congratulations Mr. President. The deal will include comprehensive market access for all American goods,” while the sources tied the pause to continued finalization.
What’s at stake next
The sources said the tariffs were invoked with the first-ever use of Section 338 of the Tariff Act of 1930, after Trump announced punitive trade measures against Canada in response to Ottawa’s “discriminatory treatment” of US automobiles, dairy products and alcoholic drinks.
“Trump announced the tariffs, invoked with the first-ever use of Section 338 of the Tariff Act of 1930”
Al Jazeera reported that the tariffs would have applied even to goods that qualify for duty-free treatment under the United States-Mexico-Canada Agreement, with carve-outs having previously kept much of US-Canadian trade tariff-free until now.
The dispute was also described as being complicated by Canadian provincial politics, including that eight of Canada’s 10 provinces had blocked sales of US-made alcoholic beverages since early last year in retaliation for Trump’s trade salvoes.
The sources also described the pipeline as a central political thread, with the Keystone XL project being tied to the negotiations and to Trump’s claim that the project could be revived after Biden’s permit revocation in 2021.
In parallel, the sources said the pause was conditional on formalization of the commitments reached by both governments, leaving the next step as the completion of documents before the tariffs could resume.
