Trump Hits Pause on Canada Tariffs With Keystone XL Back in Play

Trump Delays Tariffs on Canadian Goods as Trade Talks Advance

President Donald Trump on Tuesday postponed the effective date of tariffs covering nearly $20 billion in Canadian imports, moving the deadline from midnight to 12:01 a.m. Eastern Time on August 22. The action followed discussions between the two governments over disputes involving liquor, dairy products, automobiles, and auto parts.

A White House proclamation issued Tuesday night applied the three-day extension to duties first ordered on July 20 under Section 338 of the Tariff Act of 1930. That provision, which permits duties of up to 50 percent on countries found to discriminate against U.S. commerce, had not previously been used to impose tariffs. The proclamation stated that Canada had committed to addressing the listed disputes, though no final agreement text was released by either government.

The threatened tariffs would have applied to a range of products but exempted oil, gas, potash, and critical minerals, which represent major Canadian exports to the United States. Canada had previously removed American liquor from provincial store shelves in response to earlier U.S. duties while continuing to sell liquor from other countries. Trump also cited Canadian dairy import quotas and vehicle tariffs as points of contention.

Trump stated that the countries “have a DEAL,” subject to completion of paperwork. He separately wrote that the Keystone XL pipeline, which was not approved during the prior administration, “may be awoken from the grave.” The pipeline was not referenced in Tuesday’s proclamation, and no agreement confirming its inclusion had been published by early Wednesday. Canadian officials have not confirmed any such element in the negotiations.

Canadian Prime Minister Mark Carney described the talks in measured terms. “Substantial progress has been made, although there is important work still to be done,” he said after calls with Trump on Monday and Tuesday. Canada has separately sought relief from existing U.S. tariffs on steel, aluminum, automobiles, and lumber, which remain in effect. The Tuesday order addressed only the Section 338 duties.

Liquor sales in Canada are controlled by provincial governments, requiring coordination with premiers to restore access for U.S. products. Ontario Premier Doug Ford has indicated that Ontario would lift its restrictions if a satisfactory agreement is reached. The U.S. Trade Representative’s office identified goals including greater market access for American goods, economic security measures, digital trade rules, and worker protections.

Canada has until the new deadline to complete the required steps. If no agreement is finalized, the tariffs would take effect automatically. Both sides continue to address remaining differences on the broader set of trade issues.