US, Canada reach trade deal to avert steep tariffs, Trump says | Business and Economy News

BREAKINGBREAKING,

Trump announces pause on 50 percent duty on Canadian exports shortly before midnight deadline.

The United States and Canada have reached a deal to avert steep tariffs on billions of dollars of Canadian goods, a reprieve for exporters fearful of a renewed trade war between the trade partners.

US President Donald Trump made the announcement shortly before a 50 percent duty was due to take effect at midnight.

Canadian Prime Minister Mark Carney confirmed shortly afterward that the US side had agreed to suspend the tariffs until August 22.

The 11th-hour breakthrough came after Trump and Carney on Tuesday held talks aimed at finding common ground after weeks of fraught trade negotiations.

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.

In post on Truth Social on Tuesday, Trump said the sides had reached a deal “subject to finalization of documents.”

Neither Trump nor Carney provided details of the agreement, but the US president appeared to link the breakthrough to his efforts to revive the Keystone XL Pipeline.

The Keystone XL Pipeline, which has faced strong opposition and numerous delays since it was first proposed in 2008, would transport about 830,000 barrels of crude oil each day between the Canadian province of Alberta and the US state of Nebraska.

Former US President Joe Biden revoked a key permit for the US stretch of the pipeline in 2021 on environmental and economic grounds, effectively killing the project.

“The great Keystone XL Pipeline, long ago killed by Sleepy Joe Biden, may be awoken from the grave!” Trump said in his social media post.

Carney said that while “substantial progress” had been made in the negotiations, there was “important work still to be done.”

“While we continue this work, Canada remains focused on building a stronger, more independent, and more competitive economy at home,” Carney said in a statement provided by his office.

The suspension of the tariffs provides welcome relief for Canadian exporters, who depend on US consumers more than any other market.

Approximately 70 percent of Canadian exports go to the US, while the US sends about 30 percent of its exports to Canada.

While Trump has aimed a slew of punitive trade measures at Canada since reentering the White House, his latest tariffs were notable for applying to goods that qualify for duty-free treatment under the United States-Mexico-Canada Agreement.

Carve-outs in the three-way deal, which was ratified during the first Trump administration, have allowed a large majority US-Canadian trade to remain tariff-free until now.

More to follow…