Trump pauses 50% tariffs on Canada for three days, citing last-minute trade deal

Aug 19, 2026

President Donald Trump has paused his planned 50% tariffs on $20 billion of Canadian goods for three days, citing a last-minute trade deal reached hours before the August 19, 2026 deadline. While Trump celebrated the agreement and suggested it could revive the Keystone XL Pipeline, Canadian Prime Minister Mark Carney was more cautious, noting that substantial progress has been made but important work remains. The deal reportedly includes Canadian concessions on dairy, alcohol, and auto exports, temporarily averting a major trade war.

Trump tariff pause announcement

▪The 50% tariffs on $20 billion worth of Canadian imports were scheduled to take effect at 12:01 a.m. on Wednesday, August 19, 2026.
▪President Donald Trump announced on August 18, 2026, that he is delaying his plan to impose 50% tariffs on Canadian goods for three days.
▪President Donald Trump invoked Section 338 of the Tariff Act of 1930, a Great Depression-era law that has never been used before, to authorize the 50% tariffs.

Last-minute trade deal

▪Senior trade representatives from the United States and Canada met in Washington on the morning of August 19, 2026, to continue discussions on the trade agreement.
▪President Donald Trump stated that the three-day tariff pause was enacted because the United States and Canada have reached a trade agreement, subject to the finalization of documents.
▪Canadian Prime Minister Mark Carney and President Donald Trump spoke twice by phone in the two days leading up to the announcement, including a call on the afternoon of August 18, 2026.

Canadian trade concessions

▪A White House proclamation stated that Canada committed to removing measures deemed discriminatory against U.S. alcohol, dairy, and motor vehicle exports.
▪The U.S. Trade Representative's office stated that the trade deal will include comprehensive market access for American goods, economic security commitments, and digital trade alignment.
▪Negotiators discussed reducing U.S. tariffs on Canadian autos from 25% to 15%, though the two sides disagreed on which vehicles would qualify based on American-made content.

Bilateral retaliation threats

▪Canada had threatened to retaliate against any new U.S. tariffs with levies of its own, risking escalation in a trade relationship that saw $880 billion in goods and services exchanged in 2025.
▪The Canadian provinces had previously banned American liquor sales in 2025 in retaliation to earlier tariffs imposed by President Donald Trump.

Keystone XL pipeline revival

▪Following his tariff announcement, President Donald Trump shared an AI-generated image of himself pulling the Keystone pipeline out of the ground next to a gravestone reading 'Buried by Biden.'
▪President Donald Trump stated on Truth Social that the trade agreement may allow the revival of the Keystone XL Pipeline, which runs from Alberta to Nebraska.

Three-day finalization timeline

▪Canadian Prime Minister Mark Carney confirmed that the United States agreed to postpone the implementation of the 50% tariffs until the end of the day on August 21, 2026.
▪Canadian Chamber of Commerce President Candace Laing stated that the three-day tariff delay offers temporary relief but falls short of the certainty of a signed interim agreement.