U.S. President Donald Trump says he has reached a trade deal with Canada and will postpone his latest round of threatened tariffs for three days while the agreement is finalized.
After a day of down-to-the wire bargaining Tuesday, Mr. Trump announced the tentative pact less than two hours before the new levies on US$20-billion worth of Canadian goods were set to take effect.
“I have paused the 50% Tariffs against Canada, that were scheduled to kick in tomorrow morning for a three day period, based on the fact that Canada and the U.S.A., subject to the finalization of documents, have a DEAL!” the President wrote on Truth Social.
He did not specify what was in the agreement nor confirm that, if the documents were signed, he would cancel the planned levies entirely.
But he did saythe deal might somehow revive the Keystone XL oil pipeline, a Canadian priority project thwarted by U.S. permitting problems and twice cancelled by previous presidents. Mr. Trump wrote that the pipeline “may be awoken from the grave!” and included an AI-generated image of himself pulling it up from the ground.
The Globe and Mail has reported that the frenetic talks over the past month focused on the U.S. reducing, but not eliminating, Mr. Trump’s tariffs on Canadian autos, steel, aluminum and forest products and averting the implementation of his new levies.
In exchange, the U.S. demanded a long list of concessions from Canada, including that Ottawa drop its retaliatory tariffs on American autos, change how licences are allocated under the dairy supply-management system and instruct provincial governments to return U.S. alcohol to store shelves and end their Buy Canadian procurement policies. Canadian steel and aluminum would also face export quotas in addition to tariffs.
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The U.S. also pressed Canada to complete its long-delayed purchase of F-35 fighter jets from American defence contractor Lockheed Martin, give Washington the right of first refusal over critical minerals and agree to buy American-made radar planes as part of joining the planned Golden Dome missile defence system.
A Canadian commitment to maintain or increase its supply of oil to the U.S. was also under discussion, two sources with knowledge of the talks said. The Globe is not identifying the sources because they were not authorized to disclose details of the closed-door bargaining.
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In a White House proclamation postponing the tariffs, Mr. Trump wrote that “Canada has expressed a commitment to remove the discriminations or unreasonable and unequal impositions at issue,” on autos, dairy and alcohol.
In a statement late Tuesday, Prime Minister Mark Carney sounded a more cautious note than Mr. Trump.
“Substantial progress has been made, although there is important work still to be done,” the Prime Minister said. “While we continue this work, Canada remains focused on building a stronger, more independent, and more competitive economy at home.”
Mr. Carney and Mr. Trump spoke Tuesday afternoon for the second time in as many days, shortly after negotiators put a proposed deal on the President’s desk.
The office ofU.S. Trade Representative Jamieson Greer, who led negotiations for the Trump administration, said on social media that the deal will include “comprehensive market access for all American goods, economic security commitments, digital trade alignment” and other unspecified provisions.
Last month Mr. Trump threatened to impose the 50-per-cent levies on Canadian electronic equipment, dairy and alcohol, among other products, under Section 338 of the Smoot-Hawley Tariff Act of 1930.
These would be in addition to the 25-per-cent tariff on autos, 50-per-cent tariffs on steel and aluminum and 10- to 25-per-cent tariffs on forest products he imposed last year under Section 232 of the Trade Expansion Act of 1962.
He set Wednesday as the implementation day for the latest levies, cranking up the pressure on Canada to agree to an “interim” trade deal covering some of his priority areas. After finishing this first deal, the sides are expected to undertake the more complicated trilateral renegotiation of the U.S.-Mexico-Canada Agreement, which could stretch into next year.
One of the toughest issues to resolve, according to three sources with knowledge of the negotiations, has been autos, with Mr. Trump explicitly callingfor all assembly to be reshored in his country. The matter was still under discussion for much of Tuesday, the sources said.
Washington offered to reduce auto levies from 25 per cent to 15 per cent and maintain an exemption for the value of American content, which makes up about half the worth of a Canadian-made car, the three sources and one other said. Ottawa wanted the value of all North American-made content exempted.
An additional complicating factor, said one of the three sources and another source, is that the U.S. wants to align its deal on autos with Canada with a parallel deal it is negotiating with Mexico.
On Tuesday evening, Mexican Economy Secretary Marcelo Ebrard was seen leaving Mr. Greer’s office. He was tight-lipped about the state of negotiations.
Forestry has also been a flashpoint at the negotiating table, The Globe has reported. Washington insisted that Ottawa should settle for a separate U.S. Commerce Department review of a different set of tariffs on softwood lumber. Canada demanded an immediate reduction in Section 232 tariffs.
If the deal does go through, Mr. Carney will have to convince both the provinces and an angry public largely opposed to trade concessions that the agreement is in Canada’s interest.
Provincial co-operation would be necessary for Mr. Trump’s demands to be met, and key sectors, such as autos in Ontario and forestry in British Columbia, were on the table in talks. Two sources, however, said provinces were not briefed Tuesday on the substance of talks.
Janice Charette, Canada’s chief negotiator, told Mr. Greer last week that, in the event the new tariffs came into effect, Canada would have to stop negotiating and retaliate.
Canadian oil exports came up in trade talks last year, when Mr. Carney first unsuccessfully tried to reach a deal with Mr. Trump. U.S. Ambassador to Canada Pete Hoekstra said in July that Mr. Carney had offered to double oil exports to the U.S., which would have involved Canada agreeing to ship an additional three to four million barrels of oil per day.
It was unclear how Mr. Carney could promise such figures, given that oil production is handled by private companies. It was also unclear how such measures would square with Mr. Trump’s desire to cut his country’s trade deficit with Canada, which is mostly the result of the U.S. importing Canadian oil.
In July, Mr. Carney announced plans to build a new pipeline to the West Coast to diversify oil exports and reduce Canada’s reliance on the U.S. market. But oil sands firms have been reluctant to commit to the capital investments needed to massively expand production and fill the planned new pipelines.
The Keystone XL pipeline was proposed by TC Energy Corp. in 2010 to ship Canadian crude to southern U.S. refineries. After years of delays and opposition from environmentalists and former presidents Barack Obama and Joe Biden, the project was shelved in 2021.
Recently, South Bow Corp. – a company that was spun off TC energy in 2024 to handle its oil pipeline business – has partly resurrected the idea with its proposed Prairie Connector pipeline, which would carry about 500,000 barrels of oil per day from Alberta to the U.S. border. The proposed pipeline would meet up at the border with a second pipeline proposed by Bridger Pipeline LLC. Mr. Trump granted a permit to the Bridger Pipeline proposal in April.
South Bow said earlier this month that it was on track to make a final investment decision by the middle of next year after securing shipper commitments.
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