U.S. President Donald Trump has suspended the new 50% tariffs on certain Canadian goods for three days, which were set to take effect on Wednesday. Trump claims that the United States and Canada have reached an agreement, but Canadian Prime Minister Mark Carney is more cautious and says that negotiations have made significant progress but have not concluded.
The announcement came after a discussion held on Tuesday between Trump and Carney, the second between the two leaders in recent days, amid intense negotiations between Washington and Ottawa, as reported by Reuters.
"I have suspended the 50% tariffs against Canada, which were set to take effect Wednesday morning, for a period of three days, as the U.S. and Canada - subject to finalizing the documents - have reached an AGREEMENT!" Trump wrote on Truth Social.
Shortly after, Mark Carney delivered his own message. The Canadian Prime Minister confirmed that discussions with Trump and negotiations between the officials of the two countries have led to "substantial progress," but he emphasized that there are still things to be done before the agreement is finalized.
Carney specified that the three-day suspension of tariffs provides time for further negotiations and finalizing the details.
The Canadian Prime Minister added that his government's goal is to secure "the best deal for Canadians," one that protects the country's economy and jobs.
What's at Stake
The new tariffs would have targeted Canadian imports worth about $20 billion and would have applied to products currently benefiting from preferential treatment under the United States-Mexico-Canada Agreement (USMCA). So far, this agreement has shielded much of the Canadian industry from the tariffs introduced by the Trump administration.
One of the main points of contention in the negotiations has been the auto industry. According to sources cited by Reuters, the two sides have discussed reducing American tariffs on Canadian cars from 25% to 15%, with the possibility of further reductions based on the proportion of American components used in each vehicle.
Washington and Ottawa have also not agreed on how this proportion should be calculated. The U.S. wants only components produced on American soil to be considered, while Canada insists that all North American components, including Canadian and Mexican ones, should be included in the calculation.
The trade dispute risks affecting other sectors of the Canadian economy. Business representatives warn that the new tariffs could lead to job losses and the closure of companies, especially in the lumber, wine, and dairy industries.
Trump revisits the Keystone XL pipeline
In the same message where he announced the tariff suspension, Trump suggested that the Keystone XL pipeline project could be revived.
The project, which, according to CNN, was supposed to transport oil from Canada to the United States, was abandoned in 2021 after former President Joe Biden revoked its authorization amid opposition from local communities and environmental organizations.
Trump said the project "could be resurrected," without providing further details.
Trade negotiations between the two countries have intensified in recent days. Canadian Minister responsible for trade relations with the U.S., Dominic LeBlanc, and Chief Negotiator Janice Charette have been in Washington since last week. On Monday, they held discussions with U.S. Trade Representative Jamieson Greer and Commerce Secretary Howard Lutnick for almost two hours.
However, it remains to be seen what the agreement announced by Trump contains and whether it will be finalized within the three days in which the new tariffs are suspended.
G.P.